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Irish loan funds
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Irish loan funds
The Irish loan funds were microcredit organizations that operated in Ireland between 1720 and 1915. They were run by local associations that made small loans to the industrious poor, and were often very successful. At peak there were about 300 loan funds.
Some of the funds were set up in the 18th century, and many more in the 19th century after regulatory legislation was passed in the wake of the 1822 Irish Famine. The regulations became more restrictive in 1843, perhaps due to pressure from the banks. Over half the loan funds closed due to the new rules combined with the economic disaster of the Great Famine (1845–1849). The remaining loan funds faced growing competition from other sources of credit and the shrinking rural population, but some survived into the 20th century.
Most of the records from the loan funds supervised by the London-based Irish Reproductive Loan Fund Institution before the famine have been preserved and are of great value to people researching their ancestry.
Jonathan Swift (1667–1745) may be credited with starting the loan fund system when he created a small fund with £500 of capital for use by poor but creditworthy people who had projects that promised high return on investment but who lacked collateral. The small loans were made to "poor industrious tradesmen" for reproductive purposes: the seed money would multiply. Swift required borrowers to present a guarantee from two neighbors, "for it was a maxim with him, that any one known by his neighbours to be an honest, sober and industrious man, would readily find such security; while the idle and dissolute would be this means be excluded".
Many similar loan funds were created in the ensuing decades by local volunteer societies. Thus the Dublin Musical Society was incorporated in 1756 to make loans "upon the same system as Dean Swift".
The loans were seen as a low-cost form of relief from poverty. An act of 1778, the Charitable Musical Society Act 1777 (17 & 18 Geo. 3. c. 12 (I)), let the Musical Society appoint persons in other towns "to receive contributions, and to lend out such sum or sums of money interest free" to "indigent and industrious manufacturers." The act said, "industrious tradesmen ... are often incapable of earning to themselves a livelihood for want of money to buy materials and other necessaries for carrying on their respective trades; whereby several of that useful class of men have perished, and their families reduced to beggary and become a burthen to the publick." The act also said borrowers had "been raised from poverty and despair to comparative comfort and confidence, and saved from being a charge on the Poor Rate or Mendicity Institution."
The loan funds were attractive to middle-class women depositors because of their charitable nature, and convenient for women living in small towns far from commercial banks. The Derry Sermon Charity, founded by the ladies of the Pery family, began to make small loans to the poor in the 1770s.
In 1839 the Letterkenny Loan Fund committee had seven women out of seventeen members. All the committee members were women in the O'Brien's Bridge Association for Bettering the Condition of the Poor in the Adjoining Districts of Tipperary, Limerick and Clare. A witness told the 1855 Select Committee on Loan Fund Societies that "an old lady smuggled in a sum of money which she said she did not wish her husband to know she possessed".
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Irish loan funds
The Irish loan funds were microcredit organizations that operated in Ireland between 1720 and 1915. They were run by local associations that made small loans to the industrious poor, and were often very successful. At peak there were about 300 loan funds.
Some of the funds were set up in the 18th century, and many more in the 19th century after regulatory legislation was passed in the wake of the 1822 Irish Famine. The regulations became more restrictive in 1843, perhaps due to pressure from the banks. Over half the loan funds closed due to the new rules combined with the economic disaster of the Great Famine (1845–1849). The remaining loan funds faced growing competition from other sources of credit and the shrinking rural population, but some survived into the 20th century.
Most of the records from the loan funds supervised by the London-based Irish Reproductive Loan Fund Institution before the famine have been preserved and are of great value to people researching their ancestry.
Jonathan Swift (1667–1745) may be credited with starting the loan fund system when he created a small fund with £500 of capital for use by poor but creditworthy people who had projects that promised high return on investment but who lacked collateral. The small loans were made to "poor industrious tradesmen" for reproductive purposes: the seed money would multiply. Swift required borrowers to present a guarantee from two neighbors, "for it was a maxim with him, that any one known by his neighbours to be an honest, sober and industrious man, would readily find such security; while the idle and dissolute would be this means be excluded".
Many similar loan funds were created in the ensuing decades by local volunteer societies. Thus the Dublin Musical Society was incorporated in 1756 to make loans "upon the same system as Dean Swift".
The loans were seen as a low-cost form of relief from poverty. An act of 1778, the Charitable Musical Society Act 1777 (17 & 18 Geo. 3. c. 12 (I)), let the Musical Society appoint persons in other towns "to receive contributions, and to lend out such sum or sums of money interest free" to "indigent and industrious manufacturers." The act said, "industrious tradesmen ... are often incapable of earning to themselves a livelihood for want of money to buy materials and other necessaries for carrying on their respective trades; whereby several of that useful class of men have perished, and their families reduced to beggary and become a burthen to the publick." The act also said borrowers had "been raised from poverty and despair to comparative comfort and confidence, and saved from being a charge on the Poor Rate or Mendicity Institution."
The loan funds were attractive to middle-class women depositors because of their charitable nature, and convenient for women living in small towns far from commercial banks. The Derry Sermon Charity, founded by the ladies of the Pery family, began to make small loans to the poor in the 1770s.
In 1839 the Letterkenny Loan Fund committee had seven women out of seventeen members. All the committee members were women in the O'Brien's Bridge Association for Bettering the Condition of the Poor in the Adjoining Districts of Tipperary, Limerick and Clare. A witness told the 1855 Select Committee on Loan Fund Societies that "an old lady smuggled in a sum of money which she said she did not wish her husband to know she possessed".