Cork Credit Unions are seeing an increase in loan applications due to the cost of living crisis

A credit union in east Cork has seen its borrowing rise by 25 per cent on a year ago due to the cost of living crisis, meaning it has lent £2m of more to its 16,000 members.

Youghal Credit Union said back-to-school loans increased 75%, while college loans increased 45%. It is just one of many credit unions in Cork that have seen an increase in back-to-school applications and general borrowing as families feel the pressure of rising costs.

Patrick Heaphy, CEO of Youghal Credit Union, says it’s clear people are struggling to afford basics, adding that some schools asking parents to shop at more expensive outlets are making it worse things.

“We have heard from members that a local school has said that all children should be provided with a specific laptop which costs €900. Of course people will struggle to find that money.

“It is important that people who feel the pressure of rising costs call their credit union rather than going to a pawnshop.

“A lot of former customers of Provident, the high interest lender, came to us when the business closed. Their credit was ruined. It’s the people who can least afford it who get scammed. .”

Tony Hughes, CEO of Access Credit Union, which has three branches in West Cork and 28,000 members, says its back-to-school loans have only increased by 10%, but the average loan size has increased by 600 €.

Many people who have taken a loan from us in the past two months have done so for the first time, people who have only been savers are now borrowing.

“We are non-profit and can only charge a maximum of 8.7% APR. Pawnbrokers are allowed to charge 187. Even if you think that’s the quickest route, it’s not not the best,” he said.

Anne Marie Kelly is the loans officer for Health Service Credit Union, which has a branch in Cork as well as six others across the country, with 40,000 members.

“We had a 27% increase in the amount of student loans taken out and a 29% increase in the size of those loans,” Ms. Kelly said.

“It’s important to keep in mind that people borrowed less during the lockdown and spent more, so we expected some rebound,” she added.

Ms Kelly also said members were struggling with schools requiring uniforms to be purchased from specific outlets.

“We really need to call this out, it’s not appropriate in our economic climate,” she said. “Parents have enough trouble as it is.”

Liam O’Doherty, CEO of credit union Cobh, says its loan-to-loan ratio has always been different to others in Cork, due to the region’s socio-economic makeup.

“We’ve always had very strong back-to-school loans. We’ve put a lot of controls in place to make sure people aren’t constantly borrowing, and by going straight from loan to loan, we’re giving a lot some advices.

“The real problem we’re seeing is that people’s savings completely run out, and the setbacks that cause them then,” O’Doherty said.

Leslie M. Gill