The Opportunity for Irish Credit Unions in SME Lending


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In a world still recovering from the financial crisis of the last decade and the health crisis of the last 18 months, credit unions face two challenges in building their SME loan business. Credit union appetite for risk is low, and loan demand from SMEs declined during the economic slowdown. But today, with business activity on the upswing, there has rarely been a moment in recent memory when the opportunities for SME lending have grown as rapidly and the economic necessity of supporting SMEs in rebuilding their cash flow has been so critical. SMEs play a key role in the Irish economy and communities, representing two thirds of the country’s total employment.


In this research, the winners of the CFCFE Credit Union Research Prize 2020, a team from the Financial Services Innovation Centre at Cork University Business School, focus on the challenges of SME lending by credit unions, exploring what levers might build confidence in lending to SMEs, such that loan books begin to grow again. It looks at examples from other countries, and the role of collaboration and technology in supporting the design of new services.