(1) A society which has satisfied the Registrar that, at the end of the last financial year in respect of which its annual accounts have been laid before an annual general meeting of the society, the ratio of its reserves to its assets was not less than 4% may make a loan to a member -

(a) of an amount not exceeding the amount which the society has agreed to lend to the member on the security of a mortgage of a freehold or leasehold estate or interest in a dwelling, for the purpose of enabling the member to provide the dwelling or to purchase the said estate or interest before the mortgage has been created; or

(b) for the purpose of carrying out improvement works to a dwelling.

(2) A society shall take all reasonable steps to ensure that the mortgage referred to in paragraph (a) of sub-article (1) is created as soon as may be after the making of a loan under the said paragraph.