LOANS TO FARMERS

New Zealand Herald, Volume LXXI, Issue 21857, 20 July 1934, Page 13

LOANS TO FARMERS

RURAL CREDIT SYSTEM REMOVAL OF RESTRICTION [BY TELEGRAPH SPECIAL REPORTER] WELLINGTON, Thursday In a statement issued by the Prime Minister, Mr. Forbes, reference is made to the results achieved by the rural intermediate credit system, which was introduced in 1928 for the purpose of providing farmers with ready finance on the security of their stock and chattels at a moderate rate of interest and with reasonable terms of repayment. Up to June 30, 1934, the amount advanced under various modes of lending reached a total of £1,064,490. When it is recollected, says the statement, that the average loan is from £2OO to £250, it will be realised that not only has a large number of farmers been assisted, but also the work involved in the management of 'the accounts has been very substantial. The working of the system has been most successful. The losses suffered have been very small in comparison. Normally, loans are required to be repaid over a period of five years, but it has been recognised that under the abnormal conditions which have ruled within the industry in recent years, a relaxation of the terms of repayment has been necessary and numerous concessions have been given. At one stage it was necessary for the board to restrict lending, so that as a general rule money would bo made available only for purposes which would result in an increase of production, and only in special cases were loans made for the purpose of repaying existing liabilities The board does not now need to impose such a restriction and loans will be granted in suitable casis to enable farmers to clear existing indebtedness and to consolidate their finances.