I thank the Deputy for raising this issue. We are aware of the important role played by credit unions throughout society. It is one of the most trusted brands by the people when it comes to dealing with their financial affairs.
A number of commitments are set out in the programme for Government, including a review of the policy framework in which credit unions operate. As part of the review, the Department has held extensive engagement with the credit union representative bodies since September 2020 to seek feedback on their key priorities for the sector. I met with representatives of the sector and with different groups who made proposals. I am examining each and every one of the proposals, with staff in the Department of Finance.
On supporting and enabling the sector to grow, I will outline some recent developments in lending and investment regulations, SME, lending, access to finance for retrofit, current accounts and investment in approved housing bodies. The Central Bank has in recent years completed reviews of both the lending and investment frameworks. Since January 2020, credit unions have a combined capacity to provide up to €1.1 billion in SME and mortgage loans, with additional lending capacity available for those that can comply with certain conditions, or on approval by the Central Bank. As at December 2020, credit unions had combined mortgage and SME loans of €344 million, an increase of 12% on the previous year. There is tremendous scope for them to continue doing that.
I welcome the announcements that 19 credit unions, supported by Irish League of Credit Unions, the Credit Union Development Association and Metamo, have been approved by the Department of Enterprise, Trade and Employment for participation in the Covid-19 credit guarantee scheme. This is a tremendous opportunity for credit unions to obtain finance at low cost where the State guarantees 80% of the actual loan and the risk to the credit union is low. They can give out unsecured loans up to €200,000. It is a fabulous scheme and I encourage as many credit unions as possible to take this up and participate in the scheme as quickly as possible.