Eamonn Maloney (Dublin South West, Labour)
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I thank the Minister for his presence for this Topical Issue. I presume he is familiar with the report carried by the UCD Geary Institute, published a week or so ago, under the title Creating Credit, Not Debt. Essentially, it is about the idea of moving towards a personal microloan scheme in Ireland. It is a very impressive blueprint and a very valuable piece of work that focuses very much on the position in which many working families find themselves as we crawl out of this recession. In some cases, nobody is working in these families and, in other cases, there may be one or two people working on low wages.

Most of us in the House are familiar with how people have been "set aside", for want of a better term, because of what happened in the recession. With many working or poorer people, access to banking institutions no longer exists and people who heretofore would have had bank accounts may not necessarily still have them. They are in a precarious position when they require some borrowing requirement, as most people do at one stage or another in life. This could be as small as €100 or as large as €1,000 or €2,000. One of the highlights of the report should be a concern for all of us, and it came about because of what happened as a result of the recession. I supported section 35 of the credit union legislation as there was a necessity for it at the time.

We all appreciate this, given the position some of the credit unions were in. However, we are now in a situation where a lot of poor people who had no access to banks find credit unions face restrictions in providing emergency loans. There is a staggering figure of 360,000 people who are borrowing from moneylenders, the highest number in the history of the State. This research presents an opportunity for the Minister and his Department. If it is not the ideal solution, it can be tweaked. We can come up with a solution that will take the poorest people away from moneylenders.

Michael Noonan (Limerick City, Fine Gael)
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I thank the Deputy for raising this important issue. He is referring to the report published last week entitled, Creating Credit, not Debt, by Mr. Georges Gloukoviezoff, UCD Geary Institute for Public Policy. It was jointly funded by the Social Finance Foundation and the Central Bank of Ireland. It proposes the establishment of a new personal micro-loan service, operated through the credit union movement, to assist people who have no access to loan finance through current mainstream banking and credit union loans. Access throughout the country to appropriate credit is a very important issue, one that the Government has worked hard to address. It has focused, in particular, on access by SMEs to micro-credit, including through the establishment of Microfinance Ireland. Microfinance Ireland is making it easier for businesses to start up, expand, succeed and create jobs by lending through the microenterprise loan fund which is targeted at start-up or growing microenterprises across all industry sectors. Such initiatives are bearing fruit, impacting on real jobs and providing vital support for business people and their families who are entrepreneurs. My colleague, the Minister of State with responsibility for business and employment, Deputy Gerald Nash, recently announced a revised scheme to allow more businessesto avail of this initiative.

Of course, there are also issues for families accessing appropriate levels of credit, many of whom are dependent on moneylenders at times of need. That is why the report is an important addition to the debate. It provides useful material on how a scheme could work and presents examples of such schemes in other countries. In considering the issue care must be taken that this is done in a way that addresses the real needs of those concerned, does not inadvertently pull people into further debt and does not expose financial institutions such as credit unions to unsustainable risk. It is a key issue with availability of any credit that the risk is appropriately assessed. On a number of occasions I have highlighted the Government's recognition of the important role of credit unions as a volunteer co-operative movement and also the importance of getting lending going in the economy. However, the issue of lending must be constructively considered in order to ensure a viable credit union sector into the future. As Minister for Finance, my role is to ensure the legal framework for credit unions is appropriate for the effective operation and supervision of credit unions, while the registrar of credit unions at the Central Bank is responsible for administering the system of regulation and supervision of credit unions. The registrar has recently highlighted that while the valuable role of credit unions within their communities and, of course, the demand for credit from many members are fully accepted, it is important from a regulatory perspective that credit unions are prudent in how they lend money, particularly as it is the money of the saving members of credit unions that is ultimately lent to borrowing members. Ensuring these borrowers can repay is paramount in the protection of those savings.

Credit unions are undergoing a period of significant change with the implementation of new legislation and regulations and restructuring within the sector. The Government recognises that credit unions have played and continue to play a crucial and prominent role in meeting the financial, economic and social needs of communities. While credit unions have shown a willingness to embrace change, while staying true to their core values, the safety of members' savings and the security of the credit union sector as a whole remain priorities for the Government. The financial system in Ireland has undergone much change in recent years and we want to ensure all of society has access to the system. Tackling financial exclusion is essential. One element of this is access to banking facilities. In this context, my Department is looking at the development of a basic bank account. This will be featured in the transposition of the payment accounts directive which must completed by September 2016. The report from the Geary Institute for Public Policy at UCD is another useful addition to the debate on the best strategies to tackle financial exclusion. I note that the Citizens Information Board and the Social Finance Foundation both commented on the value of the report and I expect that there will be further work on the issue in the coming months. My Department will obviously carefully consider any proposal made.

Eamonn Maloney (Dublin South West, Labour)
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I am encouraged by the Minister's closing remarks to the effect that his Department will evaluate the report. Perhaps we might have a solution to this very serious problem as an outcome of it. I acknowledge that the Minister has previously praised the credit union movement in Ireland, which he was quite right to do. This has been widely acknowledged by the credit union movement. There are five separate credit union branches in my constituency and I keep communications open with them. As parliamentarians, we all accept the need for regulation and section 35. However, I hope I am not misquoting the Minister when I recall that at one stage he said he would consider a review of the section as the economic climate changed. I hope I am right in saying this. That is why I am encouraged by his final remarks and hope something will come out of this. We must take people away from loan sharks. It is not specifically an urban problem; it is widespread in rural Ireland where families also fall to the mercy of moneylenders. I go back to the point that within the scope of the research there is an opportunity for the Department to operate within the parameters of such a scheme to solve the problem. The number of people I cited is phenomenal and the issue is causing a great deal of misery for many poor working families. As legislators, we should work to ease the pressures they are under. I thank the Minister for taking this matter and look forward to something more substantial emerging in the next couple of months to initiate something in this field.

Michael Noonan (Limerick City, Fine Gael)
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I again thank the Deputy. The report was jointly funded by the Social Finance Foundation and the Central Bank of Ireland. As the foundation is not widely known, I note that it is a wholesale lender of social finance, providing finance for social lending organisations in order that they, in turn, can lend to borrowers seeking funding primarily for the purposes of community development and social enterprise. I assume that both the Central Bank of Ireland and the Social Finance Foundation will examine the report. I would welcome any proposal they might wish to make arising from it.