Seán Fleming (Laois-Offaly, Fianna Fail) | Oireachtas source

I propose to take Questions Nos. 11, 16, 30 and 75 together.

I thank the Deputy for raising the expansion of credit union services. The Government recognises the importance of credit unions. The programme for Government contains four specific commitments for the sector. These can be condensed into one key commitment, which is to enable the credit union movement to grow. That means growing credit unions' lending books. I addressed the Irish League of Credit Unions AGM in Belfast at the weekend which was also addressed by the registrar of credit unions. It was made clear at that meeting that the loan-to-asset ratio in the credit union movement is about 27%. That is not a sustainable level, which is why many of them have difficulties because they are not generating enough income. I have met many representatives of credit unions individually. Some of them have told me that in years gone by, 60% or 70% of their membership would borrow from them at different times of the year but for many credit unions the percentage of members who borrow from them now is well below 20%. Therefore, a key issue for the credit unions is not a shortage of savings but a shortage of loan applications. I really encourage them to lend more. The retrofit scheme is a perfect fit for the credit union movement because people who go into the scheme will need to borrow. Credit unions will be able to give loans over a longer period than they could historically. They will not have to take a charge on a house. The major banks will not want to finance them as much because they will be giving out big unsecured loans and it will not be worth their while to take out security on a house for a loan that might be for a retrofitting project. The scheme is perfect for the credit unions because they know their people and will be happy to give out unsecured loans. That is what I would encourage the credit unions to move into. They have lost business. Over the years, people used go to them for car loans but that is all done through garage finance now. It is a big issue and we are working constructively with them.

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