352 PROVISION OF BORROWING FACILITIES. 



Terminating society, the Chit associations of various sorts, and 

 the Benefit societies. Of the Terminating societies there is one 

 which is thoroughly rural, its promoters are village residents, none of 

 whom knows English, its clients are largely agricultural, its original 

 term was for seven years, on the expiry of which it was wound up 

 with a net book profit of Us. 2,400, of which seven-eighths would, 

 when realized, go to the directors ; about half was still outstanding. 

 The society was re-started immediately on a much larger scale 

 embracing distant villages, and is therefore likely to be largely 

 defrauded or to lose heavily. The Chit associations calling themselves 

 Nidhis vary in method, in one town the method is as follows : each 

 100 members form a class or group; these subscribe 1 rupee each per 

 week ; from this Rs. 100, Rs. 5 are deducted as commission to the 

 directors, and the balance, is put up to Dutch auction : the bids go as 

 low as Rs. 74. The difference between Rs. 74 and Rs. 95 is divided 

 among the 100 members of the class. The borrower executes a 

 bond with sureties for the whole sum and repays it by the usual 

 weekly subscription. No interest is charged, but the premium and 

 commission amount to very heavy interest. In case of failure to 

 repay a suit is filed; one of these Funds, started in 1890 at the 

 head-quarters of a District Munsif's Court, had, in less than three 

 years, filed 150 suits ; another started in 1891, had filed nineteen in 

 twenty months. The Benefit societies are those which provide 

 money for various domestic and social occurrences by means of 

 subscribed shares, some are, or were, Insurance secieties ; these have 

 mostly died out, and the so-called Insurance societies described 

 in Government Order, No. 3308, Judicial, dated 7th December 

 1885, would never be tolerated under the control of a proper 

 law. These societies do not come within the scope of the 

 present study. 



The central structure of an ordinary society is that of a terminating 

 society consisting of a maximum number of shares which are paid 

 up by regular monthly subscriptions and terminate with the period 

 for which the society is founded. The society is wound up at the 

 end of the given period, say, forty-five or eighty-four months 

 approximately, each member takes one or more shares for which he 

 pays at the rate of (say) 1 rupee per month ; at the end of the period he 

 will have paid up Rs. 45 or Rs. 84, and will be credited with this amount 

 pins profit, a share on which Rs, 84 have been paid in eighty-four 



