Friday 30 September 2016

Calls for extension to loan scheme

Published 19/05/2016 | 02:30

Labour Party senator Kevin Humphreys Photo: Damien Eagers
Labour Party senator Kevin Humphreys Photo: Damien Eagers

Almost 1,200 'hassle-free loans' have been paid out under a new State scheme, with many credit unions now warning that they have reached their limit under the current rules.

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The micro loans scheme, which provides loans to families of up to €2,000, was launched in November in a bid to tackle the dependence on moneylenders.

New figures obtained by the Irish Independent show that some 1,173 loans have been issued by 28 credit unions since the launch of the scheme.

While evidence shows the highest loan value to date is €1,800, some 68pc of the loans process were for sums of up to €500.

And significantly, the data from the Department of Social Protection shows 11 credit unions have reached their limit of issuing 50 hassle-free loans.

The scheme sees loans being approved within an hour with just minor credit checks.

It is aimed at low-to-middle income families who have been refused loans elsewhere.

Interest rates of up to 12pc will be applied on the loans, compared to rates of up to 188pc applied by private firms.

The pilot scheme, which is supported by St Vincent de Paul and overseen by the Central Bank, is due to finish at the end of this month.

But Labour Party senator Kevin Humphreys, who spearheaded the scheme while junior minister at the Department of Social Protection, said it is imperative that the scheme is extended.

"What this scheme has done is taken the moneylender out of the loop," Mr Humphreys told the Irish Independent.

"I would be calling on the Central Bank to recognise the success of this scheme, particularly illustrated by the fact that 11 credit unions reached their limit of 50 loans," he added.

Irish Independent

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