Ms Noreen Byrne:

I think it should include such a possibility of clustering. The centre held an interesting conference a week or so ago on credit union services organisations and some of the supplementary documentation we have attached is from the speakers who attended the event. Their conclusion in respect of the idea of mergers is that while they will work in the short to medium term, they do not work in the long term because one merely ends up merging entities, retaining the same model and moving assets around the place. Consequently, in ten years time or whatever, one will end up with the same kind of issue. Their view on the idea of credit union services organisations, CUSOs, is that it allows the credit union to keep local the important relational aspects, that is, the interface with the member. However, one can collaborate on and cluster together some back-office operations to cut down on one's costs or potentially to create another source of income or whatever. The interesting point about the west Cork model is the four co-operatives concerned, namely, Bandon, Drinagh, Barryroe and Lisavaird, are strong on the ground. It actually is a very efficient model in that Carbery deals with and concentrates on the global stuff, while the co-operatives such as Bandon and Barryroe focus on the local. In a way their entire orientation is towards the local, which means they get involved in interesting projects such as onion production or renewable energy. For example, Barryroe is involved in pig production. The model allows for this because such co-operatives are looking to the local, while Carbery deals with the global scenario. Moreover, representatives of the aforementioned co-operatives of course also sit on the Carbery board. The west Cork co-operatives have been highly successful in respect of milk prices and so on and have beaten many of the other co-operatives. Their structure facilitates this because they are so member-focused.

The phrase, "local presence", has been thrown around a lot over the past two years or so. However, what does "local presence" mean? It does not simply mean an office or whatever. There is a great difference between having an office and having a board at which all the decision-making is made. A student at the centre is conducting some research at present on a credit union that was merged. He is finding that while the credit union is able to provide some additional services, the members say it does not outweigh the loss of the relational aspect and so on because when the members now approach the credit union, the decision is made somewhere else, which makes a huge difference. Another feature of having a board in a credit union is there is someone who is walking down the street and picking up ideas locally. All that entrepreneurial and innovative stuff is gone and basically while one retains a local, flag-flying presence, in a sense it is an empty shell. I consider such a local presence to be a key competitive advantage of the credit union and it is only later, when one starts to erode it, that one will perceive what was lost, by which time it is too late as there is no going back.