Michael McNamara (Clare, Independent) | Oireachtas source

I thank Deputy Harkin for preparing the Bill and for the opportunity to discuss the historical role of credit unions and the role that they can play in the future, which is even more important. The timing is fortuitous from my perspective, as I attended an event last Friday night to celebrate 50 years of Derg Credit Union, which is the credit union that covers the area in which I live - Scariff, over to Broadford, and down to Killaloe and Ballina. I will not thank the individuals who were involved in setting up that, but everybody in the community knows who they are and they are indebted to them for the role that they have played in the community over 50 years. They provided money to people who could not get money anywhere else. The money had a useful social function in keeping people away from moneylenders, but also in starting small businesses and getting people off the ground when they could not access funding. The credit union still has a hugely important role to play in that regard.

I was flabbergasted to learn that Derg Credit Union now holds €33 million. When I look at the community that I live in, I see what the €33 million could do if the credit union was able to invest, but it is not. Credit unions have a significant difficulty. The main correspondence that I get from people in Clare, not just from the Derg Credit Union area, but across the county, is complaints that they have been contacted to take money out of the credit union because it is incurring a cost in storing the money. All the money is in the control of community-minded people who want to spend it on something that could give a financial return but also a societal return.

Helene McManus, the president of the ILCU, was at the event and she spoke about housing. A way must be found so that instead of having vulture funds coming in from abroad, picking the bones of a young generation, those savings of perhaps a slightly older generation, but from the same communities, can be put to good use and provide gainful accommodation. The investment will provide a financial return. The money is safe because the vulture funds would not spend all this money on housing in Ireland if they did not think it was secure and it would not provide a return. There must be a way. If the Minister of State is going to put this Bill back for nine months, I urge him to look at this in particular. I know he has acknowledged the role the credit unions play throughout the country, including in his own area, but we need to see how this money can be harnessed, in the way that it has been in the Sparkasse system in Germany, which is not dissimilar to our credit unions.

I wish to turn to another part of the Bill, which is bureaucracy. There is a need for oversight, but there is a big difference between oversight and strangulation. To get a €2,000 loan for a community defibrillator group, the following were required as underwriting requirements: a comprehensive business plan, and detailed financial projections appropriate for the scale and complexity of the loan. They must be provided to the credit union before it grants the relevant loan. The comprehensive business plan should include the following at a minimum: an executive summary; a description of the business; a market analysis of the current sectoral market positions; staffing and operations, financial projections, including key assumptions, profit and loss accounts; and balance sheets and cash flow projections for three years. That is for a loan for a defibrillator; it is not to build the national children's hospital or the national maternity hospital.

If we had that level of oversight for the national children's hospital, we might not have a huge hole in the ground at the cost of billions to the Exchequer. We do not have that oversight because Ireland has a great ability to have a huge level of bureaucracy and oversight for the little people, who are spending small amounts of money, but for the big people with large amounts of money, the attitude is "Ah sure, they know better". That is the way the Civil Service, and Ireland, operates. That has to change because people have to be allowed to provide something like a community defibrillator without going through massive amounts of rigmarole. There has to be appropriate oversight but, equally, people have to see that the oversight and the system is fair. There has to be oversight for the bigger projects too. Maybe some of this bureaucracy could be better directed elsewhere in the State rather than towards some of what is required of credit unions. I am not saying there should not be oversight. There should, but it should be appropriate. Above all, we need to harness the funds available to credit unions and put them to use for the benefit of our society. Nobel economics prizes have been won for microfinancing around the world. This is an example of microfinancing we desperately need in our communities in Ireland.

See this speech in context