Ms Lorraine Corcoran:

We have been running the It Makes Sense loan product scheme locally with credit unions since late 2015. We have found that to make it attractive and to move people from a very ingrained moneylending model is very difficult. For that particular loan product, we organised a repayment method through the household budget scheme, which made the repayments very attractive, allowed for savings and allowed the credit unions to work with people who might have a default history or just were not used to dealing with the credit union. Those people had the support to come into the local credit union, build up that track record and move on to standard lending. We have some amazing examples of how that has worked really well.

However, we also found as part of this initiative that it was not enough. That is why we called for the cap on moneylending rates. It is not enough to have a really good and attractive option. That looks fine on paper and makes sense for some people but, for others, it does not. It is not necessarily intuitive that somebody would go to a credit union even if the loan it is offering is at a lower rate than that offered by a moneylender. We have also found over the years that the people who typically borrow from home-collection moneylenders deal with finances on a week-to-week basis. It is not a case of their standing back and saying that a loan is costing them X amount more per year. It is a question of asking whether they can afford something in a particular week. It might be an extra fiver and they will make a decision there and then as to whether it is worth it to know they have that line of credit and that they can repay it. Those are the things we are trying to break down as part of this effort.