Credit unions around the country are showing signs of returning to financial health, new figures revealed.
The local lenders have managed to reduce the level of arrears and more of them will pay a dividend this year, League of Credit Union figures to be published today will show.
Lending fell last year but there are signs that the trend of members taking out fewer loans is beginning to ease off.
Credit unions have €5bn available to lend, according to new figures for 374 credit unions that are members of the league, a representative body for the sector.
The vast majority of credit unions are now making a surplus, or profit.
And membership of credit unions that are part of the league has gone up by 70,000 to 3.3 million people, for the year to the end of June.
Acting chief executive of the league, Ed Farrell, said savings in league credit unions was up slightly to close to €11bn now.
The level of arrears has fallen to €644m, down from €944m just two years ago, the figures seen by the Irish Independent show. This means that one in every six euro lent out is in arrears.
The gross arrears figure has fallen for 10 quarters in a row.
The net arrears figure is now below €500m, once the savings pledged against the loans in arrears are factored in. Some 300 credit unions paid a dividend last year. This is similar to interest on a savings account.
This year the league expects up to 330 of its member credit unions to pay a dividend.
The average dividend last year was almost 1pc, at a time when banks are cutting the interest they pay on savings.
Mr Farrell said the future was looking brighter.
"Confidence in credit unions has again been demonstrated by the fact that the number of members has increased by almost 70,000 in the last 12 months."
He said it was positive that the level of savings was up.
And added: "Perhaps most encouragingly of all is that gross loan arrears have reduced substantially in recent years and now stand at €644m.
"Also, it should be noted that total gross arrears have fallen for 10 consecutive quarters in a row since arrears peaked in December 2011."
The State is encouraging credit unions to merge to create stronger units.
Mr Farrell said this would lead to enhanced services, extended opening hours and increased community investment.
He said five larger credit unions had been created through mergers of members of the league this year.
No credit union has closed any offices to facilitate these mergers, Mr Farrell said.
And 86 credit unions now have the facilities to offer payments online, as part of a new initiative.