SVP to expand loan guarantee scheme
The country’s largest charity has begun acting as guarantor to help people secure loans from credit unions in Cork.
Now, thanks to its success, the remaining 13 conferences of the charity are requesting details about how it works with a view to rolling it out in their own areas.
Credit unions from around the country are also actively looking at setting up the scheme.
Cork’s SVP struck the deal with credit unions and MABS – the money advice and budgeting service – earlier this year to help people avoid high interest money lenders and offer those with bad credit history “another chance”.
SVP southern regional president Brendan Dempsey, who helped set up the loan guarantee scheme (LGS), said it was early days but people badly in need were starting to get credit.
Mr Dempsey said he believed many people accessing the scheme had previously been borrowing from lenders with APRs of up to 187%.
He said the charity was “sick to the teeth” of the scourge ofmoneylenders. Therefore, it had pledged money to act as a guarantor for people who would not normally get a loan.
“We are off the ground and have had a steady flow of requests. We have had some impossible ones though – people looking for €20,000 or €10,000, which we cannot do.”
Mr Dempsey said all 13 SVP conferences were seeking details and credit unions throughout the country had been in touch.
The LGS guarantees repayment of loans given on the recommendation of the SVP.
Essentially, the charity acts as a go-between with credit unions to try to help people establish a relationship with mainstream lines of credit. In practice, the SVP refers people to MABS, which in turn refers them to the credit union.
He said the SVP had a deal with MABS that people seeking a loan under the scheme would be fast- tracked so they could bypass the waiting lists being experiencing in some offices.
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