456 PROVISION OF BORROWING FACILITIES. 



the first of these two categories. It is the second class of loan 

 which is most onerous to the population generally, for the rate of 

 interest usually charged by the village money-lenders is so high 

 that the cultivator, having once borrowed money, but too frequently 

 finds himself involved in inextricable financial difficulties as the 

 result of a loan which may originally have been for no very consider- 

 able amount of money. 



Guided by these considerations, the Bank consented to make 

 870 loans, amounting in the aggregate to E. 26,720, and repayable 

 in five yearly instalments, to the cultivators of the Belbeis district. 

 In all these cases the money was advanced to persons who were 

 already indebted, and who were thus enabled to effect a commutation 

 of their debts on favourable terms. 



It is probable that the business has not so far proved sufficiently 

 remunerative to the Bank to compensate for the very considerable 

 amount of trouble and expense involved in dealing with a number 

 of these petty transactions. This, however, is due partly to the fact 

 that the operations have so far been conducted on a small scale. 

 The expenses, which are considerable, owing to the absolute 

 necessity of employing trustworthy and competent supervising 

 agency, will, of course, proportionately decrease as the operations 

 extend. 



It was felt, however, that no permanent success could be attained 

 unless the philanthropic considerations which cluster round the 

 treatment of this subject were so far discarded as to place the matter 

 on a sound commercial basis, and thus insure to the Bank an adequate 

 remuneration for their capital outlay. The Government therefore 

 consented to allow the Bank, in addition to 9 per cent., which is the 

 highest rate of interest allowed by law, to charge a commission of 

 1 per cent., which will go to their local agents in the villages. It is 

 estimated that, of the 9 per cent., which will be received by the 

 Bank, about 3 per cent, will go in expenses, leaving a net profit of 

 6 per cent., from which, however, any loss incurred by bad debts will 

 have to be deducted. 



This arrangement, I hope and believe, is of a nature V> 

 interest the Bank in the extension of the scheme. In fact, the 

 Bank has now consented to extend its operations to three more 

 districts. E. 100,000 will be advanced in these districts, of which 

 E. 25,000 will be devoted to loans repayble within the year. The 



