There was an interesting article about Irish credit unions in todays The Sunday Times. The article basically questioned the ability of Irish Credit Unions to offer competitive loans at present and I feel it prompts the debate - whats the future for Irish Credit Unions?
Brendan was quoted in the article saying “The really serious problem facing the credit unions is that they are massively under-lent,” - on this I agree fully with him. I know in my own area, Mullingar (agruably Irelands largest community credit union with 29,339 members), the union made this exact point a year ago in the Annual Report - they can't lend out enough money... so what did they do? They bought the Town Mall! A quick look at this years balance sheet - €76m in loans verses €90m in Investments. Its nice to see they are doing or trying to do something with the excess funds, but I note that the Town Mall - which is located at the heart of a thriving town - actually lost money this year!
As far as I know, Mullingar is the exception to the rule, that credit unions are overtly expensive, with a relatively low (compared to other credit unions) loan interest rate of 7.9%, an annual interest rebate of 20% (real rate is less than 7% thanks to rebate) and a dividend of 2.5%. Yes still high compared to "top up your mortgage and pay 3.5% interest" - but better than 9%+ interest.
My view is that new blood and an end to the reliance on volunteers is sorely needed. The treasurer of our Credit Union - which has €149m in savings - received just €6,250 this year for his work!
Brendan was quoted in the article saying “The really serious problem facing the credit unions is that they are massively under-lent,” - on this I agree fully with him. I know in my own area, Mullingar (agruably Irelands largest community credit union with 29,339 members), the union made this exact point a year ago in the Annual Report - they can't lend out enough money... so what did they do? They bought the Town Mall! A quick look at this years balance sheet - €76m in loans verses €90m in Investments. Its nice to see they are doing or trying to do something with the excess funds, but I note that the Town Mall - which is located at the heart of a thriving town - actually lost money this year!
As far as I know, Mullingar is the exception to the rule, that credit unions are overtly expensive, with a relatively low (compared to other credit unions) loan interest rate of 7.9%, an annual interest rebate of 20% (real rate is less than 7% thanks to rebate) and a dividend of 2.5%. Yes still high compared to "top up your mortgage and pay 3.5% interest" - but better than 9%+ interest.
My view is that new blood and an end to the reliance on volunteers is sorely needed. The treasurer of our Credit Union - which has €149m in savings - received just €6,250 this year for his work!