DUBLIN, Ireland–More than 1,000 borrowers have now taken advantage of a new microcredit program being piloted by this country’s credit union movement as part of an attempt to curb the growth of what’s known here as “moneylending.”
The “It Makes Sense” microcredit loan program was launched in November, 2015 to offer a cheaper alternative to the expensive short-term loans offered by moneylenders across the country.
According to figures from the Irish League of Credit Unions, some €500,000 has been loaned out to 1,017 members since the scheme was launched, “exceeding expectations” and the “majority” of the loans were for an amount of €500 or lower. According to the Irish Times.
A spokesperson noted, however, that since Christmas demand for the loans has slowed.
The “It Makes Sense” program was launched by 30 credit unions with a goal of rolling it out nationally by June of this year.
To apply for a short-term loan, applicants need to bring just two social welfare slips to their local credit union, and their loan may be approved on the same day, or at most, within 24 hours, the Irish Times reported. Credit unions can charge a maximum 12% on the loans (12.68%APR) on amounts of between €100 and €2,000. As a comparison, a €500 loan with a moneylender could cost as much as €650 to repay, or €515.72 with an “It Makes Sense” loan, according to the Times.
The Irish League said that figures show demand for short-term loans was greatest from younger members, with those aged between 18-35 accounting for 62 per cent of all loans. This contrasts with just 1% among the over-66s group, and 5% for those aged between the ages of 56 and 65.
There was a fairly even spread when it came to gender, with 56% of those opting for the loan female.