Friday, 22 July 2016

Credit Unions stand ready to help solve social housing issues

  The housing strategy (Action Plan for Housing and Homelessness) launched by Simon Coveney T.D., Minister for Housing, Planning, Community and Local Government, is ambitious and absolutely critical. We are all too keenly aware of the housing crisis which we face, including the struggles faced by young people in trying to buy their own homes, the rapid rise in rental prices particularly in urban areas, the thousands of people who find themselves in a long queue for social housing and indeed the stark increase in homelessness and people living in long-term emergency accommodation. 

  While there are many positive measures in the report, the announcement of the provision of 47,000 social housing units by 2021, at a cost of €5.35 billion, is particularly welcomed and is a very significant move in tackling the huge challenges which are faced in this area.  

  Credit unions affiliated to the Irish League of Credit Unions (ILCU) have in excess of €8.5bn held in surplus funds. It is a long held aspiration of the credit union movement to be able to use these funds in a way that is both more sustainable and socially aware. To this end, the provision by credit unions of funding for social housing is a key policy platform of the Irish League of Credit Unions and one which we have raised repeatedly with Government and other key stakeholders.

  This housing report is the most far reaching in terms of its expected outcomes but it is not the first. It is one thing to have the political will to address the unacceptable situation of homelessness and people living in long term emergency accommodation. It is another to develop an appropriate funding mechanism to make these desired developments a reality. 

  In June 2016, the Oireachtas Committee on Housing and Homelessness made a number of priority recommendations including that Government should establish an off-balance sheet funding mechanism for social housing and should seek to mobilise as quickly as possible, all possible sources of funding, including funding from the Irish League of Credit Unions. 

  The ILCU welcomes the commitment in the Action Plan regarding the “..establishment of an Innovation Fund to support the development by AHBs (Approved Housing Bodies) of innovative financial models..” and that “Support will be provided from this Fund to an Irish Council for Social Housing (ICSH)/ sector-led new special purpose vehicle, involving investors, including the credit union movement”.

  By enabling the allocation of some surplus funds to social housing, the credit union movement could go a long way towards meeting the Government’s funding requirement of €5.35 billion. The key benefit for the Government of this proposition would be that this would enable the Government Strategy to be fulfilled over short, medium and long term time-horizons. Credit unions could become a significant funder of the social housing strategy.

  The key benefit for the population as a whole is obvious; the creation of a sustainable supply of social housing opportunities for those in need. And for credit unions, it would provide a modest return, while enabling excess funds to be used in a method which is core to the ethos of credit unions, to directly support people and communities to meet their social and financial needs. Furthermore, the ILCU believes that if the provision of funds by credit unions for social housing proves to be workable, it could perhaps be used as a template for investing funds in other social or community initiatives.

  The report notes that good housing anchors strong communities. As credit union members the length and breadth of the country will testify, local credit unions can also help to anchor the communities which they serve, providing critical financial services to all on a not-for-profit basis. Credit unions stand ready and willing to assist in helping to solve the huge social housing issues which the country faces.

Friday, 15 July 2016


Every credit union has a core…a core ethos that together we can do more, we can build a movement fast approaching half a million members in Northern Ireland alone, and a core belief in the need to provide access to affordable credit to every member of their local community.
At that core, and the beating heart of every credit union, are people. Like you and I, ordinary people who believed in this movement enough to dedicate their time, passion and knowledge.
It has been a huge year for local credit unions across Northern Ireland with more than one in three adults now members of our community based movement. Across Northern Ireland, our membership of 464,000 people has given us a fantastic base to provide more affordable loans to families and individuals to help make ends meet.
The figures speak for themselves – with £467 million put into the local economy in loans to members, and there is a similar amount available for those who need our support in the future.  Our credit unions in the province are a huge part of that success story. They are providing a community based financial service without the burden of huge paybacks or indeed the fear of that unexpected knock on the door.
The loans they are providing are filling oil tanks, meeting school and college costs, providing for major family celebrations, helping with big household purchases and of course assisting those who have suddenly found themselves out of pocket through no fault of their own.
It is important that as a movement we acknowledge the role of our members, volunteers, staff, managers and boards in each of the local credit unions for holding true to their community centred approach and values – and ensuring that at all times we are an organisation where members come first.
The economic turbulence of the past years has presented many challenges and opportunities for credit unions in Northern Ireland from both a regulatory and service provision point of view. We welcomed over 90,000 new members through our doors throughout the recession years; unprecedented at a time of such enormous financial instability. It is therefore vitally important that we do not underestimate the increasingly important role that credit unions can play in our economic recovery and future financial service provision.
When you look at the success on the ground in local communities and Northern Ireland as a whole it is perhaps no surprise that we have been selected to host a gathering of the World Council of Credit Unions this July. It is true we fought off stiff international competition to win this honour, but it is equally true that it was the strength of our membership and the impact we are having locally which gave us that extra edge to secure the right to host the Council.
We can look forward to welcoming up to 2,000 delegates from more than 60 countries. The event is an important opportunity not only to highlight the success of the movement in Northern Ireland but also to learn from the experience of those in other countries.
We will have an opportunity to learn how credit unions from across the globe have been responding to the economic crash and its impact on their communities, their role in the recovery as well as the roll out new technology. In an era when information can be sent across the world with the click of a mouse credit unions must keep pace with developments. Electronic finances, online accounts and apps are what our members are used to and expect and we are determined to meet that challenge.
However whatever changes are to come we will remain committed to our core values. We will always be community based, our members always come first and our future – like our past has been – will be shaped by the belief that we are ‘People Helping People’.

Wednesday, 4 May 2016




(23rd April 2016) 1,000 delegates from 420 credit unions across Ireland are met on the weekend of the 23rd / 24th April 2016 at the Irish League of Credit Unions Annual General Meeting at the University of Limerick Concert Hall. The theme for the weekend’s conference was ‘Credit Unions –Shaping our own future’ and discussions primarily focused on the strategic review of the credit union movement and the opportunities for growth that this presents. President of Ireland, Michael D Higgins delivered the opening address to delegates at the event on Saturday morning.

Over the course of the weekend, delegates heard presentations and analysis and contributed to detailed discussions on critical aspects of credit union operations. Regulatory and legislative changes will be key agenda items, as credit unions move to offer a broader range of services to the increasing needs and demands of their growing membership.
The movement is a ‘sleeping giant’ with millions of members, significant financial resources, dedicated volunteers, professional managers and staff, and a priceless reputation for integrity. In particular, the not-for-profit business model, social contribution and democratic processes differentiate the movement from other financial services.
However, the movement as a collective has not realised its full potential over the past two decades. While members are saving more, loan to asset ratios have dropped across the island. Cash and investments have increased, but they are producing very low returns. Meanwhile, costs are increasing.
Against this background, the ILCU Board decided to establish a Review of the Irish League of Credit Unions and appointed Dr. Eddie Molloy and his team at Advanced Organisation. The Review’s scope balanced the need for a broad representation of voices with the need to quickly make recommendations and progress change.
Advanced Organisation employed extensive ‘bottom-up’ engagement with credit union volunteers and staff representative of different credit union categories (by size, location, bond type and stage of development) across the island. In addition, credit union movements in other countries were researched and engaged to understand best practice relevant to credit union performance.
The review produced three deliverables:
1.      A candid analysis of the challenges that prompted the Review;
2.      Identification of the root causes of these presenting problems;
3.      Recommended solutions in the form of:
·         A comprehensive vision of the future for the all-island Credit Union Movement;
·         An implementation road-map with indicative costs.
The central challenge is to design a movement that is more coordinated, coherent, and cost effective through an empowered Centre, while at the same time respecting and strengthening the autonomy of local credit unions.
The ultimate aim is to provide a full range of ethical financial products and services to meet people’s immediate and long term needs throughout their lives, and to operate a sustainable business model which provides a social return so that credit unions can contribute more to local communities, Irish society and developing countries. To achieve this aim, we will need to collaborate with key stakeholders across the island including Governments, regulatory bodies and the many businesses we partner with.
Shortly, after the ILCU AGM, the final report will be presented to the Board. At this time, the ILCU Board will decide whether to call an SGM to approve the first 12 months of implementation - inclusive of costs and funding mechanisms.

The potential for the credit union movement to make additional contributions towards broader community based and social needs by investing funds in social housing and small businesses for example, will also be discussed by delegates at the 2016 conference. The key benefit arising for the credit union movement from the social housing proposition would be that it would enable the movement to put a significant portion of the member funds to a more productive and economically rewarding purpose, while at the same time, addressing a key social issue that deeply affects the communities which credit unions serve. In 2015, the ILCU submitted detailed proposals to Government about how credit union funds could be provided for social housing. The proposals centred around two options. Credit unions invest in a state owned “financial vehicle” which would on-lend to Approved Housing Bodies to fund the development of social housing or credit unions invest and on-lend directly to Approved Housing Bodies to fund the development of social housing. We are currently waiting on a response from Government on these proposals.

Providing credit to small and micro businesses is something that credit unions already do and continuing to do so, in a more substantive way, is a key contribution that the credit union movement can make to a recovering economy. In a new SME discussion document, the ILCU has outlined how providing SME’s with the necessary supports to foster a culture of growth orientation and dynamism is a key matter of national policy.  In line with its operating principles, the credit union movement has an interest in supporting a vibrant and well- funded SME sector and given the economic importance of SME’s in the overall well-being of the wider economy, the Irish credit union movement has a strategic interest in supporting the sector.
Proposals contained in the discussion document focus on creating a central fund, back by a state guaranteed bond, in which individual credit unions could invest. Expertly supported and effectively regulated, pooling the resources that participating credit unions hold individually will ensure the availability of credit more widely throughout the economy.  This would match available credit union capacity with small enterprises that need credit to survive and develop.
Both the SME and social housing proposals are very closely aligned to the core values of the credit union movement - economic democracy, inclusiveness, human and social development and community focus. Credit unions are rooted in the communities that they serve. Just as credit unions had a vital place and role to play in the financial services industry in the past, credit unions today are still essential and are poised to play an important role in continuing to help their members through the current economic times by offering the financial services they want and need.

Ireland has the greatest membership penetration rate in Europe, with current membership at over 3 million members. In a reflection of the popularity and influence of the credit union movement across the island of Ireland, Belfast has this year been chosen to host the World Council of Credit Unions (WOCCU) annual conference. Over 2,000 credit union representatives from as many as 54 countries worldwide will descend on the city for the worldwide credit union movement’s premier event, taking place in July 2016 in the newly refurbished Waterfront Hall.

Commenting on AGM, ILCU President Brian McCrory said: "The credit union movement has played a key role in creating vibrant, local communities and developing our economy and society for half a century by providing accessible financial services and support. This weekend's meeting will be an important one as credit unions look to changes within the sector. 

He added: “The spotlight will be focused on how regulatory and legislative changes can lead to greater freedom for credit unions in service provision - certainly meeting the growing needs of our members is hugely important to credit unions. It is a given that change will be necessary for the ongoing renewal, updating and modernisation of our credit unions however, change does not involve sacrificing our ethos and our core values - values which have allowed credit unions to remain a popular financial service provider throughout the years."