I' KO VISION OF BORROWING FACILITIES. 37 1 



sought by the development of cheap credit and not by squeezing the 

 individuil debtor; Uu interest of all members, but especially of 

 borrowers, is;, or should be, the primary aim of the directors, and not the 

 development of largo profits for the benefit of the directorate and the 

 non-borro wers. Small savings are duly cared for and receive interest 

 higher than can be obtained in the Savings bank ; sums nearly as small 

 as s wings deposits are received with the educative benefit of compulsory 

 regularity ; petty capital is retained in the neighbourhood in 

 which it is saved, and utilized in situ ; societies and borrowers are in 

 immediate contact, so that the expenses of enquiry and insurance 

 against risks are reduced to a minimum ; debts are repaid by a series 

 of small equal instalments, so that, while the borrower repays with 

 ease, the society can recover in the Village Court, and its security 

 increases in proportion as the debt is repaid ; all payments are 

 recorded in the member's pass-book so that he can note the amount 

 at his credit, or the balance which he owes at any moment; 

 the accounts of the society are, to a certain extent, published, and 

 audit is not only possible but general. 



Such are some of the possible benefits of the Nidhi system and 

 many of these are realized in daily practice, nor is there the slightest 

 room for doubt that these societies, whenever they have been properly 

 Avorked and supervised, have been of very great benefit to their 

 members in so far as regards the grant of fairly cheap credit, easy 

 methods of repayment, and genuine accounts ; it is needless to 

 contrast these advantages with the conditions of private lending. 



RECOMMENDATIONS. 



It remains to consider what form of institution is best adapted 

 in this presidency for rural credit, the difficulties in the way of the 

 bunks, arid the best means of promoting them and their well-being. 

 The postulates of credit viz., proximity, the security of the lender, 

 and facility and safety to the borrower, will be assumed, as also 

 the correctness of the axiom that credit must be based on thrift, that is, 

 that the thrift of lenders shall provide the funds for the use of 

 thrifty borrowers. 



Tkeform <>/'(//<' fatjtfa. No central bank, not even a district bank, 

 can satisfy the conditions of 'facility* and 'proximity' when the 

 borrowers are the village folk, the great mass of whom hold lands 

 assessed at less than Rs. 30, nor can they look at rural credit business 



