Mr. Ed Farrell:

There are rules and limits within the regulations so there is an amount that we are allowed to lend for longer-term loans. Mortgages and most of the bigger business loans would be longer, five years plus loans. We are allowed to do 10% of our loans for in excess of ten years and we are able to do 20% of our loans for in excess of five to ten years. Post the recession and the financial crisis, credit unions are emerging and coming into that space. The representative bodies are helping credit unions into the mortgage and home loan space and into the small medium enterprise, SME, space as well but it takes time to develop expertise. Much of the expertise in credit assessment for mortgages and, more particularly, for business lending retired from the other players who got themselves into bother during the global financial crisis and the recession. We are all working hard to increase the amount of lending within the SME, home loan and mortgage spaces.

We have put proposals to the various Departments and to the Central Bank about centralised vehicles for both of those areas but they are not finding favour. We engaged with the Department of Business, Enterprise and Innovation and the Strategic Banking Corporation of Ireland but it has funds from other sources and it is not looking to collaborate with credit unions in the SME space. The Central Bank changed its rules for investment in centralised vehicles this year. It took the social housing piece on board but it did not take on board the concept of a central vehicle into which credit unions could invest money for onward lending from a centralised, more risk-managed position than individual credit unions, which by and large do not have the underwriting skills developed to the point where they feel confident enough to do the bigger SME lending on their own backs and putting all of the risk on their own balance sheets.

A centralised vehicle would be safer and would be a way of sharing risk, but the Central Bank has not endorsed that one. It is looking more to each individual credit union, which we feel is a slower way.