Mr. Brian Corr:

I will touch on a little bit of the scheme. The personal microcredit It Makes Sense scheme is run by the Department of Employment Affairs and Social Protection. It only applies to people who get social welfare payments. It is operated with An Post, so there is a reasonable relationship there. It only applies to those borrowers. There are other low-income borrowers to whom credit unions would lend in the normal course of business. When the Department and the credit unions are involved one might ask why more credit unions are not running the scheme. There is a whole variety of reasons which include interest rates, potential charges related to the process, and the administrative costs for what are very small loans. These loans are for a few hundred euro for a very short period of time. They are paid back quite quickly. The amount of money involved is very small. There are quite a few issues, which my colleagues may touch on.

In the report we recommended, as a group, that the interest rate cap be increased from 1% per month to 2% per month. This was not wholly tied to the cohort of borrowers who are using the personal microcredit scheme. That interest rate cap applies to all credit union lending. We recommended that it be increased for all lending. One of the main reasons for this recommendation is to give boards the flexibility to price slightly higher if they want to. It will be for boards to decide whether they want to do so. That would go some way towards meeting the higher costs of some of that small lending, but it might not go the full way towards it. This is only one of the reasons credit unions might not get involved in that scheme. Perhaps Mr. Farrell would like to touch on some of the reasons he has seen in dealing with his members on the ground.