Credit unions want state to ease lending restrictions

Credit unions want the Government to ease restrictions hampering it from lending out a larger proportion of the €13bn in assets currently on its books.

At present, credit unions have loaned out only around 40% of their available funds, whereas the normal commercial ratio would be 60-65%. This will be one of the themes addressed by the 3,000 delegates gathered in the INEC in Killarney, Co Kerry, at this weekend’s 2012 AGM of the Irish League of Credit Unions (ILCU).

ILCU chief Kieron Brennan said: “These restrictions are an issue for us. Credit unions have a willingness to lend the substantial funds at their disposal. In terms of loans versus assets, we only have 40% loaned out. This is good news.”

The credit unions have had restrictions placed on their lending while the state assesses their ability to cope with any potential bad debts. The 503 credit unions on the island of Ireland are collectively €740m behind in their debts, a figure which the ILCU has underpinned with a provision of €707m. In addition to this, the ILCU also has reserves of €1.74bn, equivalent to 14.2%.