INTERMEDIATE CREDITS

Rotorua Morning Post, Volume 2, Issue 256, 21 June 1932, Page 7

INTERMEDIATE CREDITS

NEARLY ONE MILLIAN LENT TO FARMERS. IN FIYE YEARS. A SAFE INVESTMENT. Loans authorised by the Rural In- r termediate Credit Board as a result of nearly five years' work total close1 on £1,000,000, according to a state- , ment made by the chairman, Mr. Norton Francis, at a conference of representatives of Rural Intermediate Credit Associations at Palmerston this week. The figures tp May 20 last amounted to £915,731. The amounts actually advanced each year ended June 30 were as follow: — 1928, £2034; 1929, £206,018; 1930, £261,810; 1931, £317,711; 1932, (11 months), £115,308. Delegates were present from the Wairarapa, Wanganui, Taranaki and Wellington associations. "I desire to impress on you the ne,cessjfy for influencing investments in the Rural Intermediate Credit Board's debentures,'\ said Mr. Francis, "beeause without a regular supply of loanable funds it is impossible to successfully . meet the ever-increasing demand for new loans. These debentures are a trust investment under the Act, and have an additional security of the .mortgage over live stock, chattels, land, etc., backed by a guarantge for at least 20 per cent. of the original loan or the capital of associations, the Government grant of £400,000. With such protection surely they may be considered a safe investment. It is largely on account of these; bonds ber ing a trust security that the central board has to be careful that the value of its securties is maintained on a sound banlcer's basis. This, directors sometimes consider, is a source of: hardship to. the borrower or the association shareholders. • . The Board's Policy. "The policy of the board is to at least maintain and where possible to increase the Dominion production, and applications for loans for this purpose receivq preference, though where there are special circumstances which would warrant an exception beipg made the board will be prepared to indicate whether the application may be entertained for consideration. "When through no fault of own a borrower is found to be urable to meet his interest and/or his instalments, the board will always grant him further time for payment, provided a loss of capital is unlikely." Mr. Francis concluded. "When a farmer is reliable and has a sound property it is generally better to 'nurse' the account (so long as there is no risk of a mortgagee or landlord getting possession of crops or stock under security to the board), rather than to risk the receipt of the poor prices often obtained at a forced clearing sale. The amount outstanding for loan interest at the end of last quarter was very small when compared with the sum which the board and association has invested.