PROVISION OF BORROWING FACILITIES. 461 



Under these circumstances, an endeavour was made to devise a 

 plan which would combine the advantages and obviate the disadvan- 

 tages of the two systems. This was done in the following manner. 

 The Bank incurs the whole financial responsibility of the undertaking. 

 It takes all the profits, and bears all the losses. The Government has 

 no direct pecuniary interest in the operations. The Bank, also, 

 through its own agents, does all the work of lending. In every 

 district in which operations are undertaken an agent is appointed, who 

 receives a commission of 1 per cent, per annum on any loan that he 

 may make. These agents are placed under the general supervision 

 of one English inspector. I wish to draw particular attention to this 

 latter detail, as it is an essential part of the scheme. The success, 

 which has unquestionably been attained, is mainly due to the fact 

 that he constantly visits the villages where operations have been 

 undertaken. He speaks Arabic well, and thoroughly understands 

 the habits and customs of the people. He is thus able to control the 

 local agents, both in the interests of the Bank and of the borrower 

 and he is able to explain verbally to the latter the precise nature of 

 the transactions in which they are engaging. 



It is only when the stage of repayment is reached that the Govern- 

 ment steps in. The tax-gatherers collect the money due to the Bank 

 at the same time as the land tax. Thus the Bank is relieved of all 

 the expenses of collection. 



Money is advanced at the rate of 10 per cent, of which, as I have 

 already mentioned, 1 per cent, goes to the local agents in the form 

 of commission. Of the remaining 9 per cent, it is estimated that 

 about 3 per cent, goes in covering the expenses of the Bank, thus 

 leaving a net profit of 6 per cent, from which, however, bad debts 

 have to be deducted. 



SIR EDWIN PALMER, the Governor of the National Bank, who has 

 taken a very special interest in this matter, writes to me as follows: 



" The experiment so far has undoubtedly been a success, and the 

 relief afforded to some thousands of fellaheen must have been con- 

 siderable. The fact that the Bank is prepared to advance .small sum> 

 aUa fair rate of interest has, in the districts where the Bank is working 

 caused a fall in the rate usually charged by money-lenders, and the 

 fellaheen have indirectly benefited in this way too. In one district, the 

 largest money-lender left when the Bank began operations ; in another, 

 the Bank was regularly boycotted, and it was impossible to find an 



