Q.Give reasons: A housing co-operative society depends heavily on long-term loans.

The nature of the asset a housing society deals in explains why it cannot manage on members' money alone.

It is true that a housing co-operative society depends heavily on long-term loans, and there are sound reasons for this:

1. Land and buildings are very costly. Buying land in a town or city and constructing houses or flats needs huge sums of money — far more than a society of small-means members can raise from shares and contributions alone.
2. Members are people of small means. The members join precisely because they cannot afford a home on their own, so the capital they can supply is limited. The gap has to be filled by borrowing.
3. A house is a durable, long-life asset. Because a building serves the member and his family for decades, it is proper and convenient to spread its cost over many years. Long-term loans, repaid in easy instalments, match the long life of the asset. …

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