Description
The authors conclude that small loans present a conundrum. On the one hand, they are valued and availed of by a significant proportion of members. On the other, they generate minimal income and can be costly to manage, administer and control. Cross-subsidisation of these loans mean that some members cover the costs of other members. How does this balance with the principle in Irish credit unions of solidarity? Small loans are loved, but they are not actively promoted. Credit unions could do more, but is this affordable? If not, who misses out? The issues of price, efficiency and member service are at the heart of this dilemma.
The research was funded by the Irish League of Credit Unions (ILCU). David Malone, CEO of the ILCU says of the report: “I welcome the Swoboda Research in respect of the small loans market in Ireland. In the last year Irish credit unions have issued 200,000 loans less than €2,000. This is so much more than a statistic as credit unions have supported thousands of people to navigate the cost of living crisis by providing sustainable finance.
The research findings have identified important recommendations regarding costs, pricing and enhanced member service opportunities using increased digitisation and automation. We fully support increased data being made available on the small loans market. Loans under €500 are currently not reported on the Central Credit Register (CCR). The ILCU has advocated to the Department of Finance that this threshold be reduced to €200 so that the CCR captures more data on lower value credit in the market. The ILCU will engage and actively support credit unions in evaluating the research findings and applying the relevant recommendations.”
The ILCU will facilitate a webinar, NEW REVISED DATE AND TIME 10am-11pm on Monday 5th October, to enable credit unions to hear from the authors and discuss this topic together. Booking details will be made available in due course.
