Question

Consider the following statements in relation to the loans given by Schulze-Delitzsch Co-operatives. Identify the statement that is wrong.

• A. They advocated short-term loans, usually of 90 days or less
• B. No loan was granted on individual surety but only on receipt of collateral or mortgage
• C. Credit was given as cash loans or as discounting of Bills/ Bonds
• D. Cash credit system was also introduced by them

Answer 1

Answer:

B. No loan was granted on individual surety but only on receipt of collateral or mortgage

Schulze- Delitzsch advocated short-term loans, usually 90 days or less, that could be renewed several times if need be. He also argued that a cooperative should have large enough shares, and build up suf- ficient reserves, that it could eventually rely on its own capital rather than deposits.