332 



PROVISION OB' BORROWING FACILITIES. 



The societies have not wanted for capital, except at the very 

 beginning. At first RAIFFEISEN found funds only with very great 

 difficulty and amongst the richer men who were friendly to the 

 enterprise ; his first society could find no friends till a particular 

 capitalist came forward and lent about 300 ; gradually, however, as 

 the security and regularity of the societies became known, money 

 from the country side began to flow in as deposits, so that a Savings 

 bank, open to all persons, and not merel} to members of the society, 

 is now the usual adjunct of a society, which draws much or even all 

 of its funds thence. It is found that the funds supplied by members 

 of the association in this way are assuming a larger share of the total 

 funds borrowed, viz., about three-tenths, and that these funds are 

 being received in smaller and smaller instalments, showing that the 

 small peasants have been reached, and that the hitherto inactive 

 driblets of capital are flowing in to fertilize the very neighbourhood 

 in which they took their rise ; these are assisted by the penny (10 

 pfennig) savings system mentioned above. In some associations the 

 deposits of members receive higher interest than those of outsiders, 

 and a large number are actually financed solely from the proceeds 

 of this savings branch. The confidence of the people in the great 

 security offered by the solidarity of the societies, most of whose 

 members possess some material property, is shown by the fact that 

 in the great war of 18TO-71 any amount of funds was offered to A 

 societies without interest, capital seeking security only ; i^^as 

 distinctly proved in the official commission of enquiry in 1875 that 

 the Raiffeisen societies, by the nature of their own organization, 

 though then in their infancy, suffered in time of panic less than any 

 other credit institution, the reason being that lenders were also largely 

 members. 



In the infancy of the societies 5 per cent, and even more is paid 

 as interest to lenders or depositors; gradually this is reduced, and most 

 now pay 44, 4 and 3i per cent. 



Loans. These are for all terms, from a month to ten or even 

 twenty years. Mortgages are not refused, but personal credit is the 

 usual form, one or two sureties adding their signatures to that of the 

 borrower. Cash credits are also granted. RAIFFEISEN, like SCHULZE 

 DELITZSCH, believed in the efficacy of personal security ; it brings 

 together the members of a society, and since a member will be very 

 unwilling to cause loss to his immediate neighbours, especially those 



