Ms Carmel Motherway:

The not-for-profit aspect of credit union lending enables us - in fact, requires us - to match the repayment capacity of the member intelligently with the loan he or she is taking out. In the case of a debt consolidation loan, for instance, where a person is paying an interest rate of 16% or 18% on a credit card debt, he or she will make an immediate gain by transferring that debt to the credit union. In some cases, however, people are paying lower rates on a portion of their outstanding debt such as mortgage-type debt at 6%, 5% or even better, or car loans from finance sources at 8%, 7% or even better. One must always look at the individual's repayment capacity and never go beyond it.

We generally seek to avoid stretching out a loan over time because doing so incurs a greater cost of credit for the member. He or she might be paying less interest but over a longer period of time, it will stack up. In essence, we seek to balance two imperatives in our work. On the one hand, we have the credit union ethos which obliges us to look after members and avoid making loans that are not good for them. On the other, there is the practical and business sustainability side. One can be ethical until the cows come, but if one's operations are not sustainable, one is in trouble. That is the balancing act in which we are constantly engaged. We must set the rate at a level which makes sense for the broad membership and the particular member. When a member is sitting across from us requesting assistance, he or she is the only member in the world. Our objective is to look after that individual and make sure we do right by him or her.