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Release Credit Union potential to ease economic pressure - Conor Murphy MP, MLA

9 June, 2011

Sinn Féin Finance Spokesperson, Conor Murphy MP, MLA (Newry/Armagh) has called for the potential of the Credit Union Movement to be released to assist in economic recovery

 Mr Murphy said: "The Credit Union movement was introduced to Ireland in the 1960’s by community activists concerned at the disadvantage experienced by working class people in accessing credit. The Credit Union Movement emerged because many working class communities were in the grip of money-lenders and did not have financial collateral required by banks as security against borrowings.

"In the present economic downturn government focus seems to be on protecting the interests of the Bondholders of large financial institutions – the modern day equivalent of the 'Moneylenders' and ‘Loan Shark’. There is little attention being given to assisting those most directly affected by the present financial conditions – the Small to Medium Sized Business (SME’S) and the workers whose labour made a major contribution to the economic prosperity enjoyed by developers, speculators and yes – banks over the recent decades.

"I believe that what is required rather than large banks far removed from local economic reality, are small local banks. This system – local saving banks or ‘Sparkassen’ as they are known in Germany- can form an integral part of a strong economy - imbued with a sense of community empowerment they could provide finance to the SME sector which is the heart of local economies. Between June 2009 and March 2011 German ‘Sparkassen’ loaned £15.6billion much of which went to SME’s. I also believe that we have the nucleus for such a local banking system in the Credit Union Movement. Being community based, Credit Unions are probably the most secure of financial institutions given the fact that they are not driven by the pressure to deliver massive dividends to Bondholders. If given the power to extend operating credit facilities to SME’s I have no doubt it would inject major impetus for growth into local business.

"The Executive is already on record in support of increased fiscal facilities for Credit Unions. Credit Unions have since the early 60’s provided accessible finance for families and individuals and would if properly empowered through legislation be able to provide a lifeline to SME’s and local economies in the present context. They could also provide much needed investment in social economy projects that would help regenerate communities.

"But once again the fact that we are dependent on bureaucratic British Treasury Rules that do not take account of our unique economy serves to highlight the need for fiscal powers to be transferred to the Assembly. I am calling on the respective Finance Ministers North and South to explore the possibilities of empowering the Irish League of Credit Unions to offer the financial services required by SME’s that would act as a stimulus to the island economy. CRÍOCH

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