The advantages of the Morris plan are many: 1. It promotes thrift. The loan and partial payment plan trains the borrower to weekly savings, and after the loan is repaid he will likely continue to save and take out investment certificates on the weekly payment plan.
2. The loans are based on character and habits; they develop self-respect, whereas loans obtained through a pawn shop or by an assignment of wages have a blighting effect upon the borrower. The Morris plan is not a philanthropic scheme, but puts loaning on a businesslike basis to worthy people at moderate rates of interest. These banks are an effective means of combating the loan shark.
3. The loans are made easy to repay by the weekly or fortnightly payments, adjusted to pay-days.
4. The system of weekly payments is adapted to many useful ends. The Industrial Finance Corporation has developed a system of meeting life insurance premiums by the use of investment instalment certificates. In addition, the Morris Plan Insurance Society has been organized as an adjunct, capitalized at $200,000. It has written over 17,000 policies, for about $2,375,000 worth of insurance. The insurance helps to protect the indorsers of the notes, but it is not required by the loaning bank. Merchants are invited to discount their trade acceptances at the Morris plan bank, letting the customer pay the acceptance by buying instalment certificates against maturity. Merchants are also invited to have their accounts receivable collected in this way. Instalment dealers particularly find this plan very helpful.
5. Sums ranging from $25 to $500 or more may be borrowed, without security, by a class who cannot borrow at the commercial banks. The average loan is $125. This ability to borrow has proved a boon to the honest but poor industrial classes which have no banking connections, and on their loans to date the banks have lost less than 0.1 per cent.