Credit unions offer to lend €8.5bn for the building of social housing

CREDIT unions have launched a plan to lend enough money to build 35,000 social houses over the next six years.

Revealing a massive war chest of €8.5billion, credit union officials yesterday announced they are prepared to invest ‘a significant proportion’ of this money in social housing.

They are doing so as they believe they can get a better return for their members’ money.

And they say they are offering to lend the money through either a specially established State agency or through an agency set up by credit unions.

Either entity would be able to make available to approved housing bodies billions in loans. In return, the Irish League of Credit Unions – which launched the initiative yesterday – estimates it could earn between €26million and €78.1 million.

The lower figure is based on making available loans of up to €1billion for the building of 8,750 social housing units between next year and 2021.

The higher figure is based on lending some €3.1billion for the construction of 26,250 units over the same time frame.

Last November, Environment Minister Alan Kelly’s Strategic Housing Strategy 2020 proposed the State should play a central role in the direct provision of social housing through building on ‘a significant scale’.

However, he said such construction would ideally have to be funded in such a way that would not increase the State’s debt burden.

So the ILCU yesterday launched its initiative as a means of providing funding for social housing construction that would avoid burdening the State.

It sees any number of the country’s 520 or so approved housing bodies applying for loans under the credit union scheme. The cost of these loans would in turn give the credit unions a higher yield on the €8.5billion they have to invest.