The Lough CU launches Personal Micro Credit pilot.

 ——————————————————————————————————————————————————————————————————-Please note: Unfortunately, we are prevented by law from offering this loan to any person who is not eligible for membership of our Credit Union, so to avoid disappointment we would advise anyone interested in applying to verify if you can join by checking out the map on our Membership page – if you live or work within our catchment area you can join. We are the only Cork City based Credit Union participating in this pilot.                  ——————————————————————————————————————————————————————————————————-

We’re delighted to announce the launch of a new Personal Micro Credit Project (PMC) which will be piloted initially in our Credit Union along with over 30 other credit unions across the country. The aim of the project is to make small affordable loans available to those on social welfare in our area and is a concerted effort to combat moneylenders. All applications will be subject to approval and an assessment of affordability.

 

The project will be run in partnership with the Department of Social Protection, the Citizens Information Board, the Social Finance Foundation and An Post and is open to social welfare recipients. Those who would like to avail of this type of loan will need to join The Lough Credit Union (if not already a member) and sign up for repayments to be made to the loan via the Household Budget Scheme which is run by An Post.

 

As a Credit Union we’re delighted to take part in this pilot scheme. We are all well aware of the penal interest rates charged by moneylenders, both legal and illegal, in local communities. This pilot scheme will highlight that The Lough Credit Union is a real option for people who are on social welfare in The Lough and Togher areas of the city.

 

The target audience for the scheme are those who are excluded from mainstream credit. Essentially, the aim is to offer small loans to those using or considering using a moneylending service. The project is working to create a realistic offering to counter the ‘convenience and ease’ advantage that moneylenders have in this country. An eligible person can apply for a loan of between €100 and €2,000. This type of loan will be distinct from a standard Credit Union loan.

 

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The Central Bank estimates that about 360,000 (2013 Report on Licensed Moneylending Industry) people are using moneylending services in Ireland. This does not take into account those using unlicensed operators. Interest charged on loans from moneylenders can be 290% or even higher. The maximum interest rate which credit unions can charge is 12% (12.68% APR).Credit unions have been particularly vocal throughout the recession years about the dangers of using moneylending services as in many cases, those who avail of this type of credit are getting trapped in a cycle of debt which is very hard to break free from.

 

Information on the pilot scheme will be available in Money Advice and Budgeting Services (MABS) and St. Vincent de Paul (SVP) offices.

 

Commenting on the initiative, John-Mark McCafferty, Head of Social Justice with the Society of St. Vincent de Paul, said:
“We have been advocating for an alternative to high cost moneylenders for some time and we warmly welcome the leadership shown by credit unions in the pilot to provide this product for people on social welfare who are eligible. We are working with our credit union colleagues locally throughout the pilot sites in order to ensure take-up of the scheme and more affordable credit for the households we assist”.

 

For more information please download The “It Makes Sense” Loan leaflet on our downloads page.

* Specific terms and conditions apply. Loans are subject to approval. The Lough Credit Union is regulated by the Central Bank of Ireland.