Communities to pay if credit unions can’t lend

IRISH Rural Link supports the Irish League of Credit Union’s call to review lending restrictions being imposed on credit unions by the Central Bank.

IRISH Rural Link supports the Irish League of Credit Union’s call to review lending restrictions being imposed on credit unions by the Central Bank.

The restrictions follow reports that twenty credit unions have now sought support from an emergency fund put in place to bail out troubled credit unions.

According to Seamus Boland, CEO of Irish Rural Link, communities will suffer if credit unions are not allowed to continue their role in providing relatively small amounts of credit for small enterprises and community bodies. He stated that Credit Unions have an essential role in financing community groups, farmers and self-employed persons engaged in their local economy.

Helen Dunne, Policy and Communications Officer with Irish Rural Link stated that it is not a case of supporting reckless lending, rather credit unions should not be pressurised into refusing reasonable amounts of credit to their long standing customers with good credit records. She continued “community organisations should not be penalised for the reckless lending of the banking sector. These restrictions will affect people who may never even have had a bank account, but relied on their credit union’s community based approach.”

It is understood that the restrictions do not attach to small personal loans, but Irish Rural Link has warned that the move could have the effect of increasing the numbers of people turning to moneylenders in times when other routes to credit have dried up, and putting many small farms and businesses in an impossible situation.