The Maximisation of Savings in Irish and British Credit Unions: Success, Opportunity or Risk?


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The first object of credit unions noted in Irish and British legislation is the “promotion of thrift among its members by the accumulation of their savings”. For it is through saving and the building of assets, rather than through borrowing, that members achieve long-term financial health and stability.


In recent years, for a number of credit unions, mostly in Ireland but increasingly in Britain, savings growth has become problematic. It has outstripped loan growth, with the result that insufficient income is generated to maintain the capital-to-asset ratio and to pay a competitive dividend (or interest) on savings. Added to that, in Ireland, negative interest rates on bank deposits have resulted in high balances of member savings incurring significant costs.

This study examines the impact of savings growth on credit unions. It was based on a survey of 19 Irish and 20 British credit unions, in-depth interviews with 12 credit union CEOs and conversations with seven commentators and regulators. These were supported by reference to the literature. The study took place between January and April 2021 at the height of the coronavirus (COVID-19) pandemic.