• In a survey of over 100 credit unions, all but one had additional funds to lend if they could find more members’ willing to borrow. 

• The average additional funds available to lend was just over 50% of their existing loan book. 

• ACCA (Association of Chartered Certified Accountants) and CUMA (Credit Union Mangers Association) conducted the survey at their annual joint credit union conference in Athlone with over 150 credit unions represented at that event.

Credit Unions have the potential to play a much more significant role in economic development throughout Ireland, with 50% more funding available than the average existing loan book.

This was one of the key findings within a survey conducted by the Association of Chartered Certified Accountants (ACCA) and the Credit Union Mangers Association (CUMA) at their joint conference in Athlone.

Over 95% of the 100 Irish Credit Unions who participated in the survey had additional funds to lend which could support economic regeneration regionally.  In particular, Credit Unions saw increased lending potential within the provision of products that support and incentivise green loans with sustainability performance integral to the financial offering, including loans for renewable technology for existing homes and electric cars.

However, to support the development of the sector, there was a recognition of the need to provide and a commitment to deliver new services over the coming years. Most Credit Unions stated that they were planning on providing new services such as current accounts, online banking, insurance services and pension products.

The survey also highlighted key challenges to Credit Unions’ operating environment including rising costs and the level of Central Bank regulation such as the appointment of risk and compliance officers and greater involvement of internal audit.  The need to closely monitor loan books to ensure that they complied with strict Central Bank Rules and did not become too concentrated in one area or unbalanced between short and long term loans, was another common theme that emerged.

Commenting, Grainne Murphy, Chairman of the ACCA Credit Union network, said, “The key challenge for Credit Unions is attracting new younger members’ and providing the services and loan products that younger members’ need via delivery channels that they expect, such as on line account access and credit card refinancing loans as well as loans to assist in reducing families carbon footprint.”    

Grainne Murphy added: “Home loans are not seen as a very viable option by most credit unions.  The limits currently imposed by the Central Bank on longer term loans restrict the number of loans a credit union might make.  These limits mean that the set up and monitoring costs can exceed the loan interest that the loans might earn.” 

Commenting on future growth opportunities for the sector, Aidan Clifford, “Technical Director ACCA Ireland, added, “Credit Unions are well placed to boost both SME investment and consumer spending in a way that supports the growing demand for sustainable economic regeneration in communities throughout Ireland.  As they develop their offering to reflect a very fluid and evolving sector, their valuable role in a very competitive market will increase and this is good news for the financial services sector and regional economies.