RURAL CREDITS SCHEME

Northern Advocate, 2 November 1931, Page 2

RURAL CREDITS SCHEME

POLICY QUITO POUND. ADVANCES FULLY JUSTIFIED. ANNUAL REPORT PRESENTED. (From Our Parliamentary Special.) WELLINGTON, Saturday. Financial stringency has proved a searching test of the soundness of the Rural Intermediate credits scheme, but it is claimed in tlie annual report, of the hoard, presented yesterday to Parliament, that the policy followed has been sound.. The granting of loans only to those farmers who could show reasonable margin of security and reasonable prospect of making a success of their farming operations, has, states the report, been abundantly justified. The great majority of the board’s borrowers have met their commitments in full, and with comparatively few exceptions all loans are in a satisfactory position. There are a few cases in which relief has had to be granted by postponing interest payments or suspending the repayment of principal. Representations were made to the board that, in view of the difficulty experienced by farmers in meeting their outgoings, the board should extend the five-year period within which loans must bo repaid, but the board considered that any variation in this condition would require legislative sanction, and it does not intend to move in this direction. Applications for loans to repay existing liabilities have generally been ■refused by the board, except in special cases, as preference is given to loans which will be applied to fresh productive purposes. At the request of the Government, the board relaxed its usual conditions in regard to loans not exceeding £75 whore they are required for purchase of fertilisers, provided that a guaran.tce from some institution or firm if given up' to 50 per cent, of the loan. Seven additional co-operative rural intermediate credit associations were formed during the year, the total now being 40. The amount of loans outstanding at June 30 was £314,949, compared with £156,883 a year earlier. In only two cases was it necessary to realise securities owing to the default of the borrower, and in neither case is the board likely to make a loss. The amount owing to the board on account of loans made direct to farmers is £159,475, and in its discounting business the board had outstanding at the end of the year notes and bills to the value of £15,292. Accounts are provisional at present, owing to the question of the board’s liability for income tax being under discussion. The board’s investments total £489,210, an increase of over 50 per cent, compared with the preceding year. gross income for the year was £28,916, and there is a profit of £8336., which has been made possible by the fact that £400,000 advanced by the Government for the board’s operations is free of interest for the first ten years.