FARMERS' BANKS IN BELGIUM.

Wairarapa Age, Volume XXXI, Issue 10713, 7 November 1912, Page 3

FARMERS' BANKS IN BELGIUM.

Rural co-operative banking has recently made im,ch P ro K re ' sa iu 8 . 01 ~ gium. Not the least impressive phrase of Belgian experience is the i persistence with which the idea o< : Helping the'small farmer with loan* ! lias l>een pursued in the face of obstacles. Experiments with seemingly promising legislation proceeded for about 25 years before it was discovered that the system utterly failed of its purpose. There is in Belgium a general savings b:uik under the supervision and practical control of the Government. By a law enacted in 1811. this bank was authorised to make loans to farmers and societier. of fanners, under guarantee of corporate bodies to be known as "coinpto:rt agricoles.'' It soon developed, hawover, that the larger, rather than the smaller, land-owners were being favoured. The latter were unable to offer as good securitiy a& Mie for.i.er.' and the commissions to the "eomptoirs agiicoles" from petty loans, were too small to encourage dealings with the small borrowers. The scheme, in short, had fallen through. ■ It was then that the organisation of rural co-operative banks began. The need of them made evident at once by the .fact that in the course of one ye.ir 613 of these institutions had 'been established. Except that by law these co-operative banks or societies are required to raise 'a foundation capital to start with and are not allowed to. hold their reserve fund as indivisible, there is little difference between them and the Raiffeisen banks of Germany.' The rural co-operative banks of Belgium are simply an adaptation, to conditions in that country of the German system ; the German system is the growth ? of long experience in an effort to find adequate means of meeting a universal need. Tinder the law of 1894, £40.000 from the funds of the General Savings Bank of Belgium was set aside to be loaned to the rural banks at the fixed rate of 3£ per cent. In order to participate in the benefits of this law, a mml bank must;be a member of a central ■co-operative bank and have the latter's guarantee for the loan.' The central co-operative banks are formed nmong the rural banks, each hank subscribing for a share of stock valued at £5, and assuming liability for the central savings hank's indebtedness to the sum of £SO. It will bo seen that in the entire system interests 'ire carefully intertwined members holding the dud relationship to each other- and to their organisations of borrower and lender, debter and creditor. Tt is thus the advantage of each to look sharply to the welfare* of all.