112 AGRICULTURAL CREDIT BANKS 



also diminishes the need of padi credit. The turnover of 

 the loemboeng in Java has, in fact, reached its highest 

 point; the money bank is gradually taking its place. 



The arrangements and management of the loemboeng 

 are subject to regulations fixed by the community con- 

 cerned and approved by the authorities. 



The loemboeng miskin and loemboeng bibit which still 

 exist at some places are gradually diminishing in number. 



The dessa loemboengs, both district and divisional 

 banks, have established a mutual fund for insurance 

 against fire and other calamities. 



(2) The Village Money Credit Bank (village, dessa, 

 negari, or marga bank). This is a savings and credit 

 bank for the benefit of the inhabitants of one or more 

 hamlets, villages, or groups of villages. It has the 

 same legal standing as the loemboeng dessa, and is 

 governed and managed in the same manner. 



In Java the working capital is usually formed by means 

 of a loan obtained from the divisional bank by employing 

 the moneys of the loemboengs or those belonging to the 

 native community. The borrowers, however, are obliged 

 to pay, in addition to the capital sum and interest, a 

 surplus which is booked as a deposit on their part. The 

 interest charged is fairly high, 24 to 40 per cent, per 

 annum, but as only small sums are lent (usually not more 

 than 10 fl. (i florin = is. 8d.) to any one person) this 

 interest is not oppressive. Repayment is made as a 

 rule in weekly or monthly instalments, e.g., if 10 fl. be 

 borrowed, n fl. must be repaid in eleven weeks; this 

 includes i fl. for interest and deposit. This arrangement 

 has the advantage that, as the bank builds up a capital of 

 its own out of the profits, a smaller amount is booked as 

 interest and a relatively larger amount as deposit. The 

 deposits are occasionally returned in part, e.g., on fast 

 days or on other important days. The high interest 

 enables the bank soon to repay the capital taken up. In 

 some places part of the deposits is retained and con- 

 verted into shares of from i fl. to 5 fl. Only such 

 persons are admitted as borrowers as shall be first 

 accepted by those already affiliated. Their identity is 

 established by means of finger prints. Although legally, 



