Credit Unions facing 'significant' risks and challenges, Central Bank warns

The Central Bank said there is still a heavy dependency in the sector on unsecured personal lending

The Credit Union Development Association (CUDA) said the sector can only achieve its potential through continuing with their business model change.

Credit unions remain heavily dependent on unsecured personal lending and need to “evolve” their business models, the Central Bank has said.

While noting an improvement in economic conditions in the sector, with reserves improving, the Central Bank said the credit union movement still faces “significant risks and challenges”. Loan-to-asset ratios remain close to historically low levels, though, increasing savings growth has slowed this year.