Credit where credit is due in this age of cash-free

Won the amount they can loan to any individual. I must admit that until last week, I only had some vague notion that if you needed a dig-out with the holiday in Spain, the local credit union was a good bet. Indeed, many farmers have the impression that credit unions can only offer ‘Mickey Mouse’ loans, often at exorbitant rates.

But following the economic turmoil of the last 10 years, maybe we should be looking at financial services with a different perspective. We’ve seen the so-called pillar banks crumble and survive only by virtue of the largesse of the public purse. I try not to think about the €29bn that we, the taxpayer, pumped into the dying Anglo Irish Bank because the knowledge that my generation will be paying this off for the rest of our working lives will just eat me up inside.

Meanwhile, the vulture funds are slicing and dicing the tail-end of those of us with non-performing loans, and the contraction of bank branches and services at local level continues.

Is there anything more depressing than a bank without a counter where you can talk to a human? ‘Cashfree’ branches where little or no cash can be either lodged or withdrawn, along with teller-less offices where any interaction with an actual staff member can only be done by appointment is the way our biggest banks are trying to shore up profits.

They’ll point to the fact that only three per cent of banking transactions are actually carried out over the counter as more and more business migrates online.

That may well be the case, but I wonder how much of the 97pc is accounted for by the masses of transactions that banks facilitate for fund managers and corporate types that inhabit and thrive in the digital sphere.

For the farmer or rural dweller looking to get a cheque cashed on a Friday morning before they head away for the weekend, a hole in a wall with a promise of an electronic transfer within five working days is no use.

So it was refreshing to spend a day with credit union staff in Clare last week as they launched their new Cultivate Loan package which they are aiming very squarely at farmers. The whole ethos seemed like the antithesis of what we think of about modern banking.

Small branches in small towns like Killaloe and Scariff, with actual real-life staff at counters dealing with punters as they came in the door. It was only when I then realised that credit unions are governed by local volunteers, selected from the loan base of each branch, that it struck me that credit unions are a concept that should be very close to farmers’ hearts.

Yes, the volunteer element is a double-edged sword in that you are relying on people, who often have little or no background in finance, to police the highly technical and procedural business of a financial institution. But in the same way that farmers can be trained up to sit on boards of multibillion euro co-op businesses like Kerry and Glanbia, credit union board members are trained in governance policy. Crucially, they bring a local ownership and less profitdriven perspective to an often ruthless business.

Locals own all of the share capital of the business through their deposits in the branch, and dividends are paid out to them on the strength of its performance.

It can sound very quaint, but this type of local co-op is exactly what is keeping many rural regions going while other transient business gravitates to the big urban centres nationally or internationally. Each credit