Wexford leads way with loans for most needy

A Personal Micro Credit Scheme trialled in Wexford and New Ross for the past nine months is being rolled out nationwide.

The scheme ensures access to small loans at reasonable interest rates from the credit union, with the option for social welfare recipients who are paid by cash to repay the money through the Household Budgeting Scheme.

Ultan Ryan, Manager of Wexford Credit Union, said Wexford was delighted to be part of this initiative. ‘Providing access to credit for those who need it most is at the very heart of the work we do. We are all very aware of the penal interest rates charged by moneylenders,’ he said.

‘ This scheme can play a vital role in helping people to avoid getting trapped in a cycle of high interest debt.

‘We were enthusiastic participants in the pilot phase and see the project as a major success, both in terms of providing low cost modest loans to the most vulnerable in our community and also engaging with them on how best to plan and budget for their family expenses.’

The target audience for the scheme are those who are excluded from mainstream credit and is open to those in receipt of social welfare payments. Essentially, the aim is to offer small loans to those using or considering using a moneylending service. An eligible member can apply for a loan of between €100 and €2,000. The repayments on the loan are made through the Department Of Social Protection’s Household Budgeting Service. Repayments will be deducted from source from the borrowers social welfare payment.

So far more than 1,200 loans have been drawn down via the pilot scheme nationally, with an overall value of over €720,000. The average individual loan is €500.

Of borrowers surveyed who received loans under the pilot scheme, more than half had previously used a money-lender, and 22 per cent were thinking about using a money-lender before they availed of the loan.

The scheme is supported by the Irish League of Credit Unions and the Credit Union Development Association.