Credit union loans average €8,000 as members get wealthier

CREDIT unions are increasingly lending larger sums of money as borrowers seek finance for new cars, home improvements, foreign holidays and even stock exchange investments.

Members are borrowing larger sums as Ireland becomes increasingly wealthy and provides more jobs than ever before.

The Irish League of Credit Unions (ILCU), which represents most of Ireland’s 525 such groups, said the higher value of loans reflected changes in society since 1958, when the first such union was set up.

According to ILCU figures, loans nationally today range from €200 to as large as €500,000, with the average at €8,000.

As well as savings and loans, which are covered by free insurance, unions also offer home and travel insurance and have just been given Government permission to offer pensions.

Today, an Irish Examiner survey of a random selection of the annual accounts of credit unions reveals most loans today are for cars, house improvement or purchase, and holidays.

Traditional loans for First Holy Communions, Confirmations and Christmas now account for less than 10% of overall lending, the figures reveal.

For instance, Waterford Credit Union made €58,051,362 of loans to members last year, with 26% or €15.2m going on cars, tax and insurance.

A further €15.5m went on home needs and improvements while €11.5m was loaned for the purchase of houses or land.

The union lent €1.8m for Christmas spending, €2.6m for hobbies and €1.6m for family or religious occasions.

The pattern was repeated at smaller credit unions like the one in Ballinlough, Cork, which loaned out €6m last year.

Members borrowed €1.7m for cars, €1.4m for household spending, €1.1m for home improvements and €482,994 for holidays.

By contrast, the union granted 15 wedding loans to a total of €58,900 and approved 64 loans totalling €70,200 for Christmas spending.

The Irish Examiner’s survey of random accounts also reveal wide differences in lending patterns between unions.

Members of Bishopstown’s credit union in Cork seem to prefer the high life when it comes to holiday borrowings.

Last year, 1,573 members borrowed €4.4m for holidays at an average of €2,769 — enough for a top family holiday for a fortnight in the sun.

At Ballinlough, Cork, 235 members of the area’s credit union enjoyed comfortable holidays, too, after borrowing an average €2,055.

By comparison, their neighbours at the credit union in Youghal, east Cork, took out 596 holiday loans for more modest breaks at an average of €1,260 each.