Seán Crowe (Dublin South West, Sinn Fein)
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Question 163: To ask the Minister for Finance his views on the recent Combat Poverty Agency study, Financial Exclusion in Ireland — An Exploratory Study and Policy Review, which found that low income families face particular obstacles in accessing and using financial services and which found that this may prevent them from engaging fully in normal social and economic activities. [10187/07]

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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Question 173: To ask the Minister for Finance his views on whether helping those on low incomes to save is an important measure to help prevent such families falling into debt. [10186/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I propose to take Questions Nos. 163 and 173 together.

The issues surrounding savings and borrowings for people on low incomes are not uniform as they can vary from person to person and over the lifetime of the individual. Persons on low incomes can encounter obstacles in accessing financial services from mainstream financial services providers. The cost and availability of credit for people on low incomes and the barriers they face in accessing mainstream and affordable forms of credit can add to the challenges individuals on low incomes encounter in managing their finances. Building up savings, where possible, can mitigate these difficulties both by reducing the need to borrow and by establishing a relationship with a mainstream credit provider.

The credit union movement has been a key provider of savings and loans since its inception and has a particular role to play in supporting savings by persons on low incomes. There are currently 427 credit unions registered with the Financial Regulator with around 2.5 million members and assets of around EUR13 billion. Since 1995 credit unions have grown significantly with an increase in savings from EUR2 billion to around EUR13 billion.

The banking industry has proposed the development of a universal bank account which would provide basic access to the Irish payments system, enabling citizens to make and receive payments electronically and assisting those on lower incomes to build up savings. However, there are a number of issues to be considered in progressing such a proposal such as the fees to be associated, who would have right of access to such an account and also the actual need for such a product, particularly in the light of the reduction or elimination of bank charges on many standard accounts in recent years and the increased competition in the banking sector.

The Financial Regulator commissioned the Combat Poverty Agency to conduct research on the nature and the extent of financial exclusion in Ireland and the barriers faced by people on low incomes in accessing a wide range of financial services. The report, which I welcomed, and to which the Deputy refers, was entitled 'Financial Exclusion in Ireland — An Exploratory Study and Policy Review' and was launched by the Financial Regulator on 11 December 2006. The Financial Regulator and my Department, together with other interested parties, are currently considering how the report's findings and recommendations can be addressed.