The It Makes Sense loan has been available in 30 credit unions since last November on a pilot basis and this week Social Protection Minister Leo Varadkar has confirmed that a scheme designed to offer low-cost loans to families is now being made available to credit unions right across Ireland.
The It Makes Sense loan is designed to make short-term credit available on a low-cost basis and is designed specifically as an alternative to high-cost money-lenders.
To-date more than 1,200 loans have been drawn down with an overall value of over €720,000. The average individual loan is €500.
Based on telephone interviews and views expressed by attendees at focus groups 52% had previously used moneylenders. 22% had considered going to a moneylender before taking out their PMC loan.
More than 90% of borrowers rated the overall credit union service as ‘good’ or ‘very good’ and would like to borrow from a credit union again.
The scheme is now moving to a permanent setting and is being offered to credit unions nationally.
Fifty credit unions have expressed an interest in The It Makes Sense loans, 18 are in the process of signing up.
Minister Varadkar speaking at the launch event at Meath Street Credit Union, which took part in the pilot scheme, said, “This small loans scheme represents real practical help for families and individuals struggling on low incomes. Many of the participants may struggle to get credit elsewhere and may not have a bank account or savings. So when the unexpected bill arrives for home or car repairs, a new fridge or a family occasion, some turn to money lenders and loan sharks. This new scheme will ensure access to small loans at reasonable interest from the credit union, with the option of repaying the money through my department’s Household Budgeting Service.”
