Mr. Ed Farrell:

Yes. Those small loans are expensive to administer. There is a deduction of 25 cent per transaction straightaway in An Post. It is a good facility that they have the deduction at source. Those loans are very expensive to administer because they are, on average, only for €500. There are a lot of transactions and a lot of work and, at 12% interest per annum, they would not break even. Their competitors are charging up to 200% or 300% interest per annum.

We are not going anywhere near there. Even if we were to go to the full 2%, it would be 24% against 200% or 300%. Credit unions would see it as a way of recouping more costs.

With regard to debit and credit cards, who knows where rates will go in the longer term. Even in the short term it is probably unlikely we will see an overdraft rate of more than 12%. Rates were never as low. At some stage they will increase, although every year it seems it will happen the following year. The people who answered the survey fall within a very small context. We are all trying to encourage more credit unions to offer formally the microcredit scheme although, as Mr. Johnson said, many credit unions offer it without saying it. We are giving more encouragement that this line of business would lose less money than it has heretofore. It will never make much money but we try to ensure each credit union breaks even without one overly subsidising another. It is not for mainstream lending and, even if it were, who would borrow a car loan at 20%? It would not be considered because it is not where rates are. We have to be competitive with our rates and most credit unions charge not much more than half of 12% on loans of between €5,000 and €8,000.