Challenges being experienced in communities all too evident to credit unions

Inflation is gathering pace, producing myriad problems for those trying to make ends meet

As staff at credit unions up and down the country do, Angela Healy gets a sense of how the economy is faring and how people are coping with the challenges it presents from the amount people save and the reasons they come to borrow.

It is a mixed picture at present, she suggests, with the pandemic and lockdowns it brought still making its presence felt in the loans being taken out for holidays people have promised themselves and work on gardens, the importance of which became all too apparent over the past two years.

As inflation continues to rise, though, and the challenge it brings just to pay the costs of everyday living grows, not everything that customers are looking to borrow for could exactly be described as a luxury.

“We’re getting a flurry of applications for holidays,” says Ms Healy, the manager of Blackpool Credit Union in Cork.

“People feel the need to get away. On average, they’re looking for loans of €2,000 to put towards their holidays. The other big one would be home improvements. They’re also borrowing to improve their gardens as people don’t look at their garden in the same way anymore. And people are taking out car loans from us at 7%.”

Once August arrives, though, householders will have to meet back-to-school costs that, like almost everything else, will be higher than ever.

Getting a pupil back to secondary school can cost €1,500 or more for one pupil, between the cost of books, transport, uniforms, sports gear and other equipment. “Sometimes, there might be a shortfall in money so they would come to us and we’d hope to bridge that gap for them,” she says.

Blackpool Credit Union has 6,500 members and the area in which it is based, on the north side of Cork, is a mainly working-class one which, as well as established residents, is home to a transient population of younger people working in multinationals such as Apple.

Ms Healy says that some members would have gone through financial difficulties in the recession. “They’ve come through it with our help. We might have restructured a loan for them.” Some fared better during the pandemic, however, and savings at the credit union increased by 6 per cent.

Changing economic landscape

As a builder and chairman of the board of Blackpool Credit Union, Sean Coleman has plenty of first-hand experience just now of how costs are rising and is concerned about the changing economic landscape.

A member of Fianna Fáil, he doesn’t believe that any government can control people’s living costs “because of what is happening economically with the war in Ukraine. Governments can only do so much but you can’t follow inflation.

“People need to assess where they’re going. Unions are looking for an increase in their rate, property prices are increasing, materials are increasing and there’s a shortage of housing. I think there’s going to be a crash in six to nine months. I don’t think the whole thing is sustainable.”

The more personal community-based nature of credit unions, he believes, gives them a special role and makes them easier for people to deal with.

“At times you need a bit of support and that is why people come to a credit union,” he says.

That, it seems, is unlikely to change any time soon.