Credit Unions Developments in the role of supporting communities Presentation to Co-operative Forum Conference Trinity College 31 st July 2010 Mark Bailey President Irish League of Credit Unions

Credit Unions are:- –Democratically controlled financial co-operatives, owned and controlled by their members and governed by a volunteer board of directors –Membership is based on shared common bond via employment, residence etc. –Providing financial services to their members on a not-for-profit basis at reasonable rates of interest consistent across all members, focused on social finance objectives –Empowering their members by giving them greater control over their financial services and better consumer protection.

Credit Unions – Ireland Northern Ireland & Republic of Ireland in Northern Ireland 398 in ROI Membership = NI 371,000 ROI = 2.5 million Assets = NI £915 million+ ROI €13 billion Loans = NI £490 million+ ROI €6billion Average loan size = NI £3,500 ROI€8,900 Differentiated regulation via the Central Bank & Financial Services Authority (ROI) and the Department of Enterprise, Trade and Investment (NI)

What is Social Finance? The provision of finance by organisations which seek a social return or social dividend as well as a financial return Social finance is distinguished from mainstream finance in that it prioritises social gain Micro-credit is one aspect of Social Finance which is focused on extending credit to enable business development Micro credit can be offered as Social Finance or as business lending

Credit Union Social Finance Initiatives Lending to those already indebted or on low incomes (40%) –(encouraging saving; offer small loans; repay at same interest rate as all other members) Lending to those moving from welfare to work, encouraging members to start their own businesses (35%) –encouraging savings, offer loans –Lending method –(direct member loans)

Credit Union Social Finance Initiatives Lending to community development groups for set up costs (15%) –Community development facilities –Sports facilities –Social economy projects which are employment and development related e.g. Community Crèche, Community cafe Lending method –Loans to limited companies –Investments in co-operative structures

Credit Union Social Finance Initiatives Lending to community enterprise groups for set up costs (10%) –Enterprise parks –Business incubation units –Affordable housing –Community services Health centres Libraries Training Centres –Highest single investment to date €8 million Lending method –Invest in co-operative structure –Loans to a limited company

Legislation Republic of Ireland –Allows credit unions to lend to groups or societies –Cannot pool funds or invest in a ‘Central Treasury’ for Social Finance Northern Ireland –credit unions cannot lend to groups or societies –Cannot pool funds or invest in a ‘Central Treasury’ for Social Finance

The Credit Union Difference Social Finance and Micro-Credit offered as an integral part of the service Focus is always on development of the member and the community It is never charity; it must have a financial return for the credit union Thank You