Irish loan funds

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.

The small loans were made to "poor industrious tradesmen" for reproductive purposes: the seed money would multiply.

[2] 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".

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.

"[4] 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 Derry Sermon Charity, founded by the ladies of the Pery family, began to make small loans to the poor in the 1770s.

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.

[6] 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".

[7] In the spring of 1822 many people in the west and south of Ireland suffered from famine caused by rain damage to the previous season's potato crop.

[8] At this time tenant farmers were often burdened with rental arrears and there was a lack of work for the growing population.

From the residue, the committee appropriated £55,185 to be lent at interest to the industrious poor in the counties of Clare, Cork, Galway, Leitrim, Limerick, Mayo, Roscommon, Sligo and Tipperary.

Trustees were appointed in each county, subject to the board of directors of the Irish Reproductive Loan Fund Institution in London.

[13] By 1839 there were many independent organizations managed by local clergy or gentry which employed clerks to administer the funds.

[19] Default rates were low in part because the managers and clerks were all local and understood the character and ability of the borrowers to repay.

An inspector wrote of Castletownshend: "Farmers by a command of money at a reasonable rate of interest ... can purchase the best seed for the land.

A report of Glandore concluded: "… habits of industry and of exertion have ... been promoted, a regard for character and habits of punctuality have invariably been generated … we can see no evils that may not be prevented by strict, judicious, and impartial administration of the Fund"[22] The Loan Fund Board's 1841 report describes a borrower who "holds a small mountain farm; got a loan, and laid out 4l.

; has at present three cows, and says he is so well off that he may give up borrowing".Another example is "A.B., formerly a day labourer, and frequently assisted by a kind neighbour in the maintenance of his family, has, by means of the Loan Fund, raised himself to independence, and is now possessed of a cow, a pony, and a good cart, with a small patch of land, which he farms to good purpose..."[23]The loan funds in Ireland by the early 1840s were very diverse in nature, and included private pawnbrokers and reorganized Mont-de-Piétés.

[22] When the Great Famine of 1845–1849 spread across Ireland many of the borrowers had to default on their loans, and more associations ran into difficulty.

However, the surviving funds recovered fairly quickly, although the industry never reached the same asset levels as before the famine, and then declined gradually over the long term.

[33] The records of the Reproductive Institution have been preserved almost intact by the Kew National Archives (ref T91) in the United Kingdom.

[36] The records cover the local associations for counties Cork, Clare, Galway, Limerick, Mayo, Roscommon, Sligo and Tipperary.

This last describes whether the borrower is still resident in the townland, and if so whether they are desperate, poor or comfortable, or where they moved or emigrated to, or their date of death.