page_title: Irish loan funds
section_title: Slow decline (1843–1915)
hierarchical_section_title: Irish loan funds / History / Slow decline (1843–1915)
caption_attribution_description: English: Famine Memorial, Doo Lough, County Mayo. Ireland. A simple cross marks the location in Doo Lough where many, trying to escape the famine, perished having not found the support they sought. On 31 March 1849 during the Great Famine, many starving people were forced to walk twenty miles or more in bad weather from Louisburgh to Delphi Lodge to attend an inspection and get famine relief. It is supposed that more than 400 people died at Doo Lough on the journey.
context_page_description: 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.
  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.
context_section_description: The loan funds in Ireland by the early 1840s were very diverse in nature, and included private pawnbrokers and reorganized Mont-de-Piétés.
  By 1843 there were 300 loan funds operating in over half the baronies in Ireland.
  About 300,000 borrowers received almost 500,000 loans a year, with a standard term of 20 weeks.
  The mean amount of a loan was ₤3, and by law no loan could exceed ₤10.
  30% to 40% of households were receiving loans in some counties.
  The depositors were wealthier than the borrowers, with a mean deposit of ₤46.
  In 1840, 44% of depositors held ₤50 or more.
  In 1843 an act was passed that reduced the maximum payable to depositors to 5%, and reduced the maximum annualized interest rate on loans from 13.6% to 8.8%, thus drastically reducing margins.
  Possibly the change was due to influence from the joint stock banks, for whom the funds had become strong competitors.
  The loan funds' capital fell and some of the loan societies closed.
  In County Cork there was a decline in societies from 36 in 1843 to 29 in 1844, with the societies of Skibbereen, Castletownshend, Ballydehob, Crookhaven and Skull all closed.
  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.
  The famine also forced many of the depositors to withdraw money from the loan funds.
  The loan funds regulated by the Irish Loan Fund Board averaged loans of around ₤1,750,000 per year between 1843 and 1846.
  Even at the peak of the famine, the loan funds granted 459,360 loans worth ₤1,712,638 in 1846 and 223,465 loans worth ₤834,855 in 1847.
  An analysis of records for the Kilconickny Fund, which served the civil parishes of Kilconierin, Lickerrig and Kilconickny, 
  noted that in the ten years up to 1851 the population had fallen by 38%, from 5,307 to 3,309.
  Of the defaulters, 29% died during the famine years and 28% were considered to be very poor. 22% had emigrated, mostly to the United States or England, but 14% were considered to be able to repay their debts.
  By 1848 funds regulated by the Irish Loan Fund Board had dropped to ₤719,000, largely due to mortality and emigration caused by the famine.
  The London-based Reproductive Loan Fund Institution funds had not been supervised effectively, and declined steadily until 1848, when lending was suspended and what money remained was distributed to other charities.
  However, many associations survived the famine, and the loan fund structure remained essentially unchanged.
  By 1851 there were 123 surviving funds, 40% of the earlier peak, and the average total lent out had more than halved.
  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.
  From the 1860s the funds had to compete with post office savings banks.
  In 1874 the total loans were ₤523,000. 
  The Board attributed recent declines partly to greater prosperity of the industrious agricultural poor, and thus lower demand for loans, and partly to the recent practice of branch banks in issuing loans as low as 10l. or even 5l. to small farmers and dealers.
  An 1875 account said "The loan has usually to be repaid in weekly instalments of one shilling per pound, and runs, therefore, for twenty weeks—interest at the rate of sixpence per pound being deducted from the original advance. The interest charged is thus equivalent to a discount of about 7 1/2 per cent per annum.
  From the 1890s the loan funds faced competition from  rural credit cooperatives.
  In 1915 the Department of Agriculture took over the few remaining funds.
caption: Famine Memorial, Doo Lough (Mayo)
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