36 BRITISH INDIA - CO-OPERATION AND ASSOCIATION 



As a rule the arrears are concentrated in a few districts, and in some 

 cases they are practically confined to a single district where the harvest 

 has been a failure. Thus, in the United Provinces (where, as has been 

 mentioned, arrears amounted to 9 per cent.) more than half the amount 

 was due from one district. In eight districts of the Province there were no 

 arrears, and in eight others the arrears were less than two per cent, of the 

 outstanding loans. 



It must be remembered that the loans returned as overdue are not 

 regarded as bad debts and are in fact, in nearly every case, recoverable. 

 The losses due to bad debts are very small indeed. 



Loans are granted on simple mortgage of land and on the personal 

 security of fellow members. In Madras, for example, 43 per cent, of the 

 total amount was secured by mortgage and 55 per cent, was lent on 

 personal security. A certain small proportion of the loans are unsecured ; 

 they are simply loans " on honour ". The normal rate of interest is 12 14 

 per cent. 



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In this chapter we have dealt only with Rural credit societies and have 

 confined ourselves to outlining their progress and giving some account of 

 their business transactions. In a subsequent chapter we shall examine the 

 w^ork of the District and Central Banks and Banking Unions. 



{To be eontinued). 



