460 PROVISION OF BORROWING FACILITIES. 



Money may be advanced to the cultivators either by the Govern- 

 ment or by a private bank. 



The objections to purely Government action in Egypt are twofold. 

 In the first place, the Government could not, without much incon- 

 venience, have provided the necessary capital. In the second place, 

 the officials of the Government have not the time to go amongst the 

 villagers and seek out those who are in want of loans. Even if they 

 had the necessary time at their disposal, it is not altogether desirable 

 that they should be employed on work of this sort. Further, they 

 have no personal pecuniary interest in the matter. When it has been 

 publicly notified that, on application to some Government authority at 

 a certain time and place, small loans may be obtained on certain 

 conditions, the Government officials naturally enough, think that they 

 have done all that is required of them. In Egypt a measure of this 

 sort would not suffice to wean the cultivators from their long-establish- 

 ed habits. They would continue to resort to the usurer, and to borrow 

 money at, perhaps, 40 per cent, although a notice might be posted in 

 the village informing them that, by walking a few miles, they could, 

 on certain conditions which they would often fail to understand, 

 borrow at 10 per cent. What was required was that some trust- 

 worthy agents should seek out clients, and explain to a large number 

 individually the advantages of the plan offered for their acceptance. 

 The Egyptian Government did, indeed, act as a pioneer in this matter. 

 In 1896 it advanced a sum of E.I 0,000, confining its operations to 

 a small cluster of villages. But although the experiment proved 

 successful, in so far as the recovery of the money was concerned, enough 

 was learnt to shew that if the scale of operations was to be extended 

 resort must be made to private enterprise. 



On the other hand, the employment of private enterprise is not 

 without its special disadvantages. The main obstacle, which stood 

 in the way of its employment in Egypt, was that no Bank possessed 

 the administrative agency necessary to insure the punctual collection 

 of the interest and capital due on a very large number of petty loan 

 operations. Neither, under the circumstances, could the agency have 

 been created. It was clear at a glance that any attempt to create it 

 would be so costly as to render it necessary to charge a very high rate 

 of interest in order to cover the expenses and leave a fair margin of 

 profit to the Bank. Thus, the main object of the scheme would have 

 been frustrated. 



