We save so much our stacks of cash can be a burden

WEST Kerry people save more than they borrow and this is proving to be a challenge for Comhar Chreidmheasa Chorca Dhuibhne.

The West Kerry Credit Union, which held its AGM despite the weather last Thursday night, has seen an increase in members’ savings from €10 million to €16 million over the past five years. This might seem like a windfall but when the amount of savings is disproportionate to the amount of loans given out Credit Union proft margins can suffer, with a knock-on impact on the dividend given to members at the end of the year.

The primary responsibilty of the Credit Union according to manager Mícheál Ó Cinneide is to protect members’ savings and the greater the amount of savings the more of the operating profit that has to be set aside to protect them.

Due to the complexities of protecting savings this can be a surprising problem, making the Credit Union “a victm of its own success” said Micheál. With this in mind, and keeping with the ethos of making the service available to as many people as possible, last year they introduced a €30,000 cap on savings.

The majority of the income earned by Comhar Chreidmheasa Chorca Dhuibhne is generated through interest on loans. Whereas the Credit Union does have money to lend, the loan packages that it can offer are governed by statutory restrictions as well as local policies. These restrictions generally affect the amount of the loan and the length of time over which it is repaid. With loans granted for a period of repayment over five years limited to 30 per cent of the total amount of loans given out.

“When people are undertaking home improvements, the loans can be quite large and we can only facilitate a few of these loans, due to these restrictions,” said Micheál. “If savings grow and your loan book doesn’t, then you have to set aside more money that you cannot use.”

It’s all in a day’s work for Micheál who ia currently drawing up a plan for the next three years. Displaying a flexibility that can only exist in local organisations, he is keen to get people’s opinions on what they want to finance in the next few years and, equipped with this information the Credit Union can then tailor loan packages for their members’ needs.

“We want to know what members want from their Credit Union,” said Micheál. “If we are not providing what people want, then we would like to know about it”.