I propose to take Questions Nos. 238 and 239 together.
A Personal Micro Credit Scheme providing for small scale loans by Credit Unions to borrowers who have difficulty accessing low cost credit has been piloted in 30 credit unions. The loans under the scheme range from €100 to a maximum of €2,000, and have a maximum interest rate of 12% per annum. Over 1,200 loans were drawn down under the Scheme during the pilot with an overall value of over €720,000. The average individual loan value drawn down was €500. The focus of the pilot scheme was social welfare recipients who availed of the loans from their Credit Union and were facilitated, with their consent, in the repayment of such loans through the Household Budgeting facility, operated by An Post. The deductions from their weekly social welfare payments were then transmitted on to the relevant Credit Union.
The Programme for a Partnership Government provides for the rollout and extension of the Personal Microcredit Scheme. Following an evaluation of the pilot, the Implementation Group, which is chaired by my Department and comprises all relevant stakeholders, is working towards this aim.
Incremental progress is being made towards extending the geographical coverage of the Personal Micro Credit Scheme through efforts to recruit Credit Unions to participate in the scheme. To help with this I have written to all Credit Union Chairpersons and Managers to encourage their participation. This is being followed up with engagement with the Credit Union representative bodies and individual credit unions.
Almost 80 Credit Unions are currently signed up to participate in the scheme, which will result in the availability of the It Makes Sense loan in almost 150 local Credit Union offices. While coverage is increasing, planned Credit Union mergers and internal resource constraints are impacting on the decision or timing of some Credit Unions joining the scheme.
While the pilot scheme was targeted towards social welfare customers with access to the Household Budgeting facility, the scheme has been extended to social welfare recipients who receive their payment electronically into accounts in financial institutions, provided the loan repayments are made by direct debit or standing order to the credit union.
A number of other enhancements to the scheme are under consideration, including extension of the Household Budgeting facility to borrowers transitioning to small loans under the credit unions’ normal lending policies. The Implementation Group is working through these enhancements and they will be incorporated into the scheme when finalised and the appropriate structures are in place.
In regard to advertising, the Implementation Group has decided that the most appropriate approach is to promote the availability of the It Makes Sense loan at a local level, in the areas where Credit Unions are participating in the scheme. The Irish League of Credit Unions, which has representation on the Implementation Group, is actively supporting local Credit Unions in marketing the scheme through the provision of posters, leaflets and raising awareness in local media. The availability of the scheme is also promoted at a local level by the Money Advice and Budgeting Service and St. Vincent de Paul which also have representation on the Implementation Group.
The list of participating Credit Unions is updated regularly on the website for the It Makes Sense loan scheme at www.itmakessenseloan.ie/participating-credit-unions and on the It Makes Sense Facebook page.
I hope this clarifies the matter for the Deputy.