Irish Credit Unions Holding Fast Against the Financial Crisis

Despite difficult trading conditions, credit unions have done at least as well as the Irish banks in terms of managing their loan books – despite a membership that is likely to be suffering particularly badly from the recession. Most loans to members are being serviced, with 18.5% of issued loans in repayment arrears. Ireland’s Central Bank reports that around 20% of banks’ mortgage lending is in arrears.

Ireland’s credit union loan arrears are fully covered by provisioning, so the unions will be able to continuing trading with relatively little damage, even if all the debts in arrears go bad (and they won’t). In September last year, the credit unions held members’ savings of more than €10bn (£8bn), while debt arrears were a little over €700m (£570m). There is some evidence that members’ commitment to their own credit unions helps to keep defaults reasonably low.

Read the full article at Co-operative News