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St Canice’s Credit Union’s income fell this year compared to 2013, largely due to a sharp drop in the number of loans to members.

St Canice’s Credit Union’s income fell this year compared to 2013, largely due to a sharp drop in the number of loans to members.

The issue was of concern at the organization’s AGM, which was held recently at the Ormonde Hotel. The balance sheet shows an 11% decrease in members’ loan portfolio, which is largely responsible for the 2.6% drop in income. Finance committee chairman Vincent Kenrick said this “worrying trend” would be the central problem the Credit Union now faces in 2015.

“The board will have to tackle the 11% drop in lending,” he said.

Reasons given for the decline included low confidence and sustained income, while the topic of money lenders was also raised. Apart from the loan issue, the assembly heard that the Credit Union has had an otherwise good year and is in excellent shape.

The balance sheet shows a balance sheet total of nearly 229 million euros, against 220 million euros, while the accounts show a solid surplus for the year ended September 30, 2014 of 6.5 million euros. The Board proposed a dividend of 1.5% on members’ savings.

The 11% drop in member loans was the main cause for concern, and when the floor was opened for discussion, Michael Saunders asked how the issue could be resolved. He said the service could be compromised by money lenders, who he said were “prevalent in Kilkenny”.

“I think that’s a big deal – why don’t people come and borrow from Credit Union? ” He asked.

Mr. Kenrick agreed that the loan situation was a major concern. He said the situation calls into question the model of what credit unions are.

“We’re probably at the lowest ratio this credit union has ever been to,” he said.

“We need to go back to the original philosophy of credit unions – that people make money available to their neighbors to borrow.”

However, he pointed out that there is a large amount of money there for responsible borrowers to borrow, and the credit union is in good shape. The Council is now considering initiatives to increase lending, as well as new products and a marketing campaign.

The balance sheet shows an 8% increase in investments and deposits. On another positive note, there has been a decrease in bad debt written off and an increase in bad debt collected. Operating expenses have fallen sharply, while salaries have risen slightly this year to 1.8 million euros, largely due to growth in the workforce.

This year marks the 50th anniversary of the founding of St Canice’s Credit Union, which opened in 1964 at the former Butts Boys’ Club. Since then, it has grown into the largest community credit union in the country, with nearly 44,000 members.

This year has seen several changes here, including the installation of a new computer system. Mr O’Reilly apologized for the recent inconvenience of migrating to the new computer system

“We didn’t expect it to be so complex or so long to install,” he said.

It is expected that this new system will have long term benefits for members. Over the next few months, Credit Union hopes to introduce debit cards and direct debit options with the aim of meeting the needs of a younger generation.

There were other indications of what the future might hold for the local branch, with many credit unions across the country merging right now. The policy of the Central Bank is to reduce the total number of credit unions, and this will likely be an urgent problem in the coming year.

Mr. O’Reilly confirmed that a small number of credit unions have approached St Canice’s and that there have been “preliminary and tentative” discussions with them, which may or may not lead to further talks.