An east Cork credit union has seen borrowing go up by 25% compared to last year due to the cost-of-living crisis, meaning it has lent out €2 million more to its 16,000 members.
Youghal credit union said back-to-school loans have gone up by 75%, while college loans are up by 45%. It is just one of a number of Cork credit unions that have seen a spike in back-to-school applications and general borrowing as families are feeling the pressure of rising costs.
Patrick Heaphy, Youghal credit union CEO, says it is clear people are struggling to afford the basics adding that some schools asking parents to shop at pricier outlets is making matters worse.
“We’ve heard from members that one local school said that all kids needed to be kitted out with a specific laptop that costs €900. Of course people will struggle to find that money.
“It is important that people who are feeling the pressure of rising costs call into their credit union rather than going to a moneylender.
“A lot of ex-customers of Provident, the high interest money-lender, came to us when the company closed down. Their credit was ruined. It is the people who can least afford it that are getting fleeced.”
Tony Hughes, the CEO of Access Credit Union, which has three branches in West Cork and 28,000 members, says its back-to-school lending has only risen by 10%, but the size of loans on average has gone up by €600.
“We are not-for-profit and are only able to charge a maximum of 8.7% APR. Moneylenders are allowed to charge 187. Even if you think it’s the quicker route, it isn’t the best one,” he said.
Anne Marie Kelly is the lending manager with the Health Service Credit Union which has a branch in Cork as well as six others across the country, with 40,000 members.
“We have had a 27% increase in the amount of education loans taken out, and a 29% increase in the size of those loans,” Ms Kelly said.
“It’s important to bear in mind that people did borrow less during lockdown and spend more, so we expected a degree of bounce back,” she added.
Ms Kelly also said that members are struggling with schools demanding that uniforms be bought from specific outlets.
“We really need to call this out, it isn’t appropriate in our economic climate,” she said. “Parents are struggling enough as it is.”
Liam O’Doherty, the CEO of Cobh credit union, says its borrowing-to-lending ratio has always been different to others in Cork, because of the socio-economic make-up of the area.
“We have always had very strong back-to-school lending. We have a lot of controls in place to make sure people aren’t constantly borrowing, and going straight from one loan to another, we give out a lot of advice.
“The real issue we are seeing is people’s savings becoming completely depleted, and the setbacks that then causes them,” Mr O’Doherty said.
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