DUBLIN, Ireland–Sixteen credit unions in Ireland are part of an initiative to use Facebook to boost lending.
The CUs involved have described the effort to date as having been “successful.”
According to The Independent, not surprisingly, the Facebook initiative targets Millennials who have been “least likely to engage with credit unions. The 16 credit unions have some 800,000 members between them.
The Independent said the CUs involved in the new foray into offering loans to Millennials on social media describe it as "digital branches.” Some of the credit unions that were the first to adopt the new approach are seeing digital lending accounting for 10% of new loans, the publication reported.
Key aspects of the new digital lending involve 30-second qualifying assessments online, and prompt phone calls back from lending officers to those filling out the online forms at appointed times.
The project has been pioneered by the Solutions Centre, a voluntary grouping of credit unions aimed at developing new financial products for consumers in areas including investments, pensions, mortgages and financial protection, The Independent said.
Kevin Johnson of the Solutions Centre told The Independent that credit unions taking part in the new digital loan plan have had to make radical changes to their own rules. These include getting rid of the criteria that people have to be members of a credit union for three months before they qualify for a loan.
Johnson reported that research conducted for the Solutions Centre by iReach found that 57% of people would prefer not to meet a bank or credit union employee when being assessed for a loan. He said strict lending assessments, required by regulators, still apply but much of the process can now be done online.
"The pilot project that was run earlier this year delivered very strong results and there are now 16 credit unions rolling out this service," said Johnson, who is also chief executive of the Credit Union Development Association (CUDA).
Under the successful pilot project, close to half of those who took out a loan had never borrowed from a credit union before, Johnson told the Independent.