Assets of unions climb to €15bn

Consumers borrowed and saved record amounts at credit unions last year, keeping €13.3 billion on deposit and borrowing €7.5 billion.

The figures represent a 5.5 per cent increase in savings on the year before and an 8 per cent increase in the value of money advanced to members.

Liam O'Dwyer, chief executive of the Irish League of Credit Unions (ILCU), which published the figures in its annual report yesterday, said credit unions would not contribute to the "escalation of reckless lending seen in parts of the commercially-driven financial services sector".

Mr O'Dwyer said ILCU, which represents all but 16 of around 550 credit unions in Ireland, had seen significant numbers of people approaching credit unions with very high credit card debts.

He said the 8 per cent growth in credit union loans was evidence of its very prudent lending policies. In the Republic, the average credit union loan at the end of 2006 was €8,060, up 6 per cent on the average loan in 2005. The average savings per member were €4,360.

ILCU president Anne O'Byrne said a new strategic plan for the movement would be presented to its biennial delegate meeting in Belfast later this month.

Mr O'Dwyer said ILCU was working with the registrar of credit unions on a revised savings protection scheme (SPS) and would bring its proposals to members later this year. The registrar, Brendan Logue, wants the SPS to become independent of ILCU and reformed so it offers more protection to members.

Total assets held by credit unions increased by 10 per cent to €15.1 billion in 2006. The credit union movement has 2.25 million members in the Republic.

ILCU's insurance subsidiary, ECCU, generated a surplus of €2.3 million on its operations in 2006 and this money will be rebated to member credit unions.

Mr O'Dwyer said too much regulation threatened the ethos of credit unions. He said a balance needed to be struck between regulation and recognition of the voluntary, not-for-profit nature of the movement.

Last year, legislation was amended so that credit unions can accept higher sums on deposit.

The percentage of loans that can be granted over terms of more than five and 10 years was also increased, after vigorous lobbying.

The report was launched by Minister for Finance Brian Cowen.