A Personal Micro Credit (PMC) Scheme providing for small scale loans by Credit Unions to borrowers who have difficulty accessing low cost credit was piloted in 30 credit unions for a six month period from November 2015. Over 1,200 loans were drawn down under the Scheme during the pilot with an overall value of over €720,000.
The Programme for a Partnership Government provides for the rollout and extension of the Personal Micro Credit Scheme. Following an evaluation of the pilot, an Implementation Group, which is chaired by my Department and comprises all relevant stakeholders, is working towards this aim.
While the pilot scheme was targeted towards social welfare customers with access to the Household Budgeting facility operated by An Post, the scheme has now also 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.
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.
Accordingly, 94 Credit Unions have signed up to participate in the scheme, resulting in the availability of the It Makes Sense loan in over 170 local Credit Union offices. Not all of the 94 are currently offering the loan. Seventeen (17) Credit Unions have decided not to offer loans under the scheme until the New Year for a number of reasons, including mergers, training requirements and internal resource constraints. A small number (4) have placed a limit on the number of loans available under the Scheme due to the high level of demand and the additional administrative work associated with setting up payment through the Household Budgeting facility. In addition, in order for Credit Unions to be guaranteed payments coming through the Household Budgeting facility, applications had to be submitted by 12 December to allow for the timely transfer of loan repayment from An Post to the relevant Credit Union.
Each Credit Union is an independent entity and the approach taken to implementation of the scheme is a matter for each Credit Union Board, at local level. Credit Unions which have signed up to participate are committed to making the PMC scheme a success, building on the experience of the pilot and working towards broadening the reach of the scheme. However, as Credit Unions are bearing all of the risk, a cautious approach is being taken, in order to ensure that the scheme is sustainable in the longer term.
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. Please feel free to contact Philip in my office if you require any further assistance with this query.
