Credit Unions Urged To Sign Up To New Loan Scheme

Credit Unions across Ireland are being urged to sign up to the newly announced 'It Makes Sense' microcredit loan scheme.

It was announced on Tuesday that the scheme, which first began trialling in November last year, was to be rolled out nationwide with immediate effect.

The initiative is designed to offer short-term, low-cost loans to low-income families and as a direct alternative to high-cost money lenders.

It is understood that to date more than 1,200 loans have been supplied under the scheme, totalling more than €720,000; the average loan amount is said to be €500.

Initially the scheme was available at 30 Credit Unions around the State, with a further 50 expressing interest in participating.

Encouraging more Credit Unions to sign up, Minister for Social Protection Leo Varadkar said: "This small loans scheme represents real practical help for families and individuals struggling on low incomes. Many of the participants may struggle to get credit elsewhere, and may not have a bank account or savings. So when the unexpected bill arrives for home or car repairs, a new fridge or a family occasion, some turn to money lenders and loan sharks.

"This new scheme will ensure access to small loans at reasonable interest from the credit union, with the option of repaying the money through my Department's Household Budgeting Service.

"I urge all credit unions to sign up and make it available to their members. There is clearly a demand for this type of scheme and the pilot shows it is providing a realistic alternative to high-cost moneylenders by offering a convenient, low-cost personal loan scheme. It also gives borrowers an opportunity to improve their creditworthiness by showing a commitment to repay a loan."

(MH/LM)