Just 8% of Credit Union fund used

A maximum of just €20m of the €250m set aside by the State in order to restructure the credit union movement will be used by the time the Credit Union Restructuring Board (ReBo) is wound down, with the remaining funds set to be pumped back into the Government’s reserves.

Ultimately, however, the restructuring of the sector could see the total number of credit unions fall from 425 in 2006 to around 300 by the end of next year.

The progress review of ReBo, published this morning, shows that just over half of the credit unions in Ireland have engaged with the Board since its inception in 2012.

Some 189 are currently engaged at varying stages of the restructuring process, with 74 having been already assisted and 36 mergers having been completed.

Now, the Minister For Finance, Michael Noonan has set March 31, 2016, as the final deadline for further applications; after which ReBo will no longer take on new cases.

It will remain in existence, however, until such time when all cases on its books are concluded.

The board has not put a figure on how many more cases will likely come before it, or how big the credit union movement will ultimately be after its work is finished.

However, it expects a number of other credit unions to come forward seeking restrucuring solutions prior to the end of next March. There are currently around 370 unions in existence.

That said, the Board also envisages only using a maximum of €20m of the €250m in the restructuring fund.

To date, only €6m of that fund has been tapped, with much of the re-investment in the strengthening of the sector coming from individual credit unions’ resources.

In 2011, 51 unions, or 13% of all credit unions, had total reserves of less than 10% of assets, the minimum amount required by the State.

That number has now dwindled to just 12, or 3% of unions, while 97% now have reserves over 10% of assets.

Minister Noonan has welcomed the progress made in the sector and acknowledged the minimal use of the Credit Union Fund.

“This Government remains fully committed to supporting the credit union movement in meeting the financial, economic and social needs of communities throughout the country.

"Credit unions will continue to have a key role in providing access to credit and other important services in local communities throughout the country,” he said.


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