Credit unions to use proportion of €9bn in lending capacity to reduce SME lending costs

Credit unions to use proportion of €9bn in lending capacity to reduce SME lending costs

A rapid growth in Credit Union lending is expected to continue as Solution Centre rolls out enhanced Credit Union Business Model.

Credit Union Development Association (CUDA) has said that its 48 strong networks of the more progressive credit unions can provide the much-needed competition to the banks.

It comes as a response to yesterday’s launch of the Joint Committee on Business, Enterprise and Innovation’s Report entitled The Cost of doing Business and last week’s decision by the Department of Rural and Community Development and the Department of Finance, not to support the establishment of a new local public banking system.

Kevin Johnson, CEO of CUDA, said:

“We welcome the excellent work of both Joint Committees and their recognition that the cost of doing business, particularly the cost of borrowing needs be brought down, and that priority should be given to working with the existing framework provided by credit unions and An Post networks nationwide."

"Credit unions are already playing an increasing role in the Irish retail financial sector and CUDA anticipates working closely with the Central Bank of Ireland to expand the product and services that credit union branches throughout the country can offer individual and business members."

CUDA has said that it has taken a leadership role in lobbying for and developing the changes that are essential for credit unions to meet the demands of the current financial landscape.

Through the Solution Centre, they have introduced new products, and implemented new processes and systems that will deliver the benefits that the advocates for public community banking are seeking.

Mr Johnson continued:

“Credit Unions have the lending capacity and are developing the expertise to take an enhanced role in relation to lending to SMEs. In tandem with the accompanying management and advisory support structures offered by the Solutions Centre, numerous credit unions throughout the country could provide loans to SME’s, say up to €75,000.”

“Credit unions can be at the financial heartbeat of our indigenous economy and can create a platform for rural revival, and indeed urban stimulation.”

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