PROVISION OF BORROWING FACILITIES. 333 



who have become security for him, it is one of the most efficacious 

 modes of securing repayment if not punctuality ; but he directed his 

 societies to be very careful not to accept, either as principal or surety, 

 an idler, a drunkard or a spendthrift, and since the societies are purely 

 local, it is easy to aviod such persons ; hence there is not only great 

 security to the society, but a direct inducement to the idle, extravagant 

 or vicious to reform in order to become members of these useful 

 societies. This is no theoretical fancy, but the result of experience ; 

 both in Germany and still more in Italy is the evidence abundant 

 that these societies do reform these very classes ; that they preach 

 temperance and self-control more practically than sermons, is the 

 evidence of priests themselves. 



When a peasant desires a loan he applies either to the office or to 

 the director living in his neighbourhood ; enquiry is then made as to the 

 candidate's solvency and his guarantees, and as to the use he intends 

 to make of the money ; if this latter is approved of, the dates and 

 instalments of repayment are settled, always in such a manner and 

 this is most important that the periods and amounts fixed shall 

 agree with the probable receipts of the borrower ; the society prefers to 

 increase the duration of a loan, and then to insist upon absolute 

 punctuality save in cases of disaster, flood, hail or famine, &c., 

 rather than to grant shorter terms with probable inabilities and 

 delays. In this way, not only can the society calculate on its 

 returns, but the borrower knows his exact liabilities and 

 that save for unusual misfortune he is safe to have means 

 to meet them ; he is also educated in rigid punctuality and 

 foresight. 



Short-term loans, viz., those granted up to one year with possible 

 prolongations to two years, or even three, are repayable usually by 

 instalments, as RAIFFELSEN considered this an important principle. 

 Long-term loans, of which those above ten years can only be granted 

 by special arrangement, are always repaid by equal annuities, which 

 include both interest and principal. It was considered advisable by 

 RAIFFlSISENj and his opinion is largely followed, that all short-term 

 loans should be made payable at a particular time of the year, viz., 

 that when the members have generally sold their crops ; this differs for 

 various neighbourhoods between November and the end of December. 

 "This practice, however, seems to cause a risk of leaving money 

 unemployed for some months, unless there is competition for loans. 



