In 1923, lack of capital in Germany led to a system of financing house-building which later conquered large parts of central and south-eastern Europe. The ‘Gesellschaft der Freunde’ (in translation ‘Society of Friends’, but entirely unconnected with the body commonly known under that name in this country) was the first Continental Building Society that worked on the following principle:

Members entering the society pay an entrance fee E and undertake to pay periodically thereafter amounts a per annum. All payments of a member are accumulated at a certain rate of interest and credited to his individual account. Whenever there is enough money in the pool to pay an amount of 1, say, then the member next on the list, in the order of entry, receives this amount and becomes a debtor for the difference between unity and the accumulated amount of his previous payments. He undertakes to pay from then on b, say, per annum until all his payments E, a and b, reach unity, when he is released from all obligations and ceases to be a member of the community.