Credit Union (Modernisation & Reform) Consultation Response 16th June 2025
Development Trusts Northern Ireland (DTNI) is a member-led network empowering communities through collective ownership, sustainable enterprise and advocacy for community rights. It was established in 2010 to serve as a network and advocate for community-led development and social enterprise.
Rural Community Network (RCN) is a regional voluntary organisation supporting rural communities to address issues relating to poverty, inequality, community and good relations. It supports groups to make their voice heard at policy influence level.
DTNI & RCN jointly organised the Credit Union (Modernisation & Reform) Consultation Event.
The meeting was chaired by Charlie Fisher, CEO of DTNI and the two speakers were Martin Fisher, head of the Irish League of Credit Unions NI and Niamh Goggin of Small Change. There were 25 attendees from 24 organisations. Find a full list of attendees at Appendix A.
Development Trusts NI sees the modernisation proposal as a practical response to the need for community wealth building, locally driven regeneration and community empowerment. Credit unions are part of the fabric of community development in terms of their role in place-shaping and development. Rural Community Network sees the consultation as a positive document, lending to groups that sustain their local area and adding to the circular economy.
Martin Fisher, Head of Irish League of Credit Union NI (ILCU NI)
The ILCU welcomes the consultation exercise and the opportunity for regulatory reform. The first two pillars of the consultation are improving local community awareness and accessibility and modernisation and expansion of financial services.
- From the ILCU’s perspective, the regulatory landscape is largely in place in terms of community and corporate lending. The question is how do we do it and do it well? There is an issue around credit union capacity and voluntary participation, so that the credit unions can respond to emerging opportunities. There are issues relating to skills and experience and building relationships between credit unions and the VCSE sector. The lending cap for corporate lending is 10% of the total portfolio and the ILCU would like to see it raised to 25%.
- Digital innovation and competitiveness are crucial for the sector. The UK Government, through the Dormant Assets Fund and the (non-NI) devolved administrations have provided nearly £200m in funding. In comparison, 3 NI credit unions have received less than £140k for improving disabled accessibility and digital services.
- There will also be work that to be done so that the DfE responds to changing demand with secondary legislation. For example, credit unions in Britain can deliver and mediate insurance products such as holiday or motor insurance.
Niamh Goggin, Director, Small Change (NI) Limited SC NI
- As a consultant with significant experience in both the credit union sector and social investment, it is clear that there are opportunities for credit unions and their communities in building stronger local economies, increasing employment and local services. However, there are the challenges in moving from relatively small personal loans to local people to larger business, social enterprise and property lending. She highlighted the failures of credit unions during the Celtic Tiger boom in the Republic of Ireland (RoI). Larger loans mean higher risks of default and higher risk of credit union failure.
- There also needs to be some realism about social investment which, in England is heavily subsidised by dormant assets funding. Social enterprise lending is a challenge because every organisation is tailored to the needs of a particular community, so there isn’t a standard assessment procedure or standard benchmarks against which to assess the lending proposition. This leads to high transaction costs which may not be welcomed by potential borrowers.
- Social investment does deliver benefits to VCSE organisations, in addition to receiving investment. Social Investors want and need their borrowers to succeed, both because of their positive social impact and because lenders need you to repay the loan so they can lend the money again to another organisations. They tend to stay very engaged with their borrowers and can provide a range of supports and expert advice to help borrowers succeed.
Responses to the Consultation
The workshop focused on the following questions in the consultation:
Corporate Membership Lending Proposals
QB5. Do you feel that credit unions should be allowed to increase their lending to businesses, charities and local community groups?
Answer: Yes.
Comment: While the workshop attendees viewed the proposal very favourably, some issues would need to be addressed. Some credit unions don’t know that they can lend to charities and local community groups, so an information and education campaign is required. Some boards are very risk averse. Credit unions are good at personal lending, but the skills, experience and processes are not in place. There are also opportunities for collaboration and loan sharing, especially for larger loans, while individual credit unions could manage loans up to a ceiling of £100,000 – £150,000.
QB6. Do you feel that allowing credit unions to lend more to corporate members may benefit local businesses and local community organisations?
Answer: Yes
Comment: Credit unions lending more to corporate members can benefit local businesses and community organisations. The example of Ballinascreen Credit Union in Draperstown was shared, with just under £250k invested in three community organisations. Draperstown benefits from the presence of the UK Social Enterprise of the Year and other credit unions could collaborate with local enterprise agencies to learn from them. Credit union lending could have a particular impact on rural businesses and social enterprises and their local economies.
QB7. Do you feel there are any risks or concerns with increasing credit union lending to corporate members?
Answer: Yes
Comment: There are concerns and risks relating to moving into new markets with larger loan sizes and different skills and requirements for due diligence, credit assessment and security. However, these concerns could be addressed through co-operation in the development of robust processes, training and development for staff, volunteers and boards and also working through Credit Unions Service Organisations as in the Republic of Ireland (RoI) and the US or approved Housing Body Funds in RoI.
QB8. How do you think credit unions could better support local businesses and social enterprises?
Answer: Credit Unions could recruit experienced business and social enterprise lenders based within their common bonds, to manage their corporate lending and to develop a supportive relationship with their clients. Engagement with Enterprise NI could be helpful. Social investment experience in Ireland, the UK and Europe has shown that businesses and social enterprises value the fact that their lender knows their business and its people well, understands their business model and supports their social impact delivery.
Collaborative Initiatives Questions
QB10. Would you support credit unions pooling their resources to offer larger loans and shared services?
Answer: Yes
There are different levels at which credit unions could pool their resources to offer larger loans and shared services:
1. A group of credit unions in a local authority or other defined area could set up a Credit Union Service Organisation (CUSO), employing experienced lenders to manage the service collectively. This would still retain the engagement and commitment to the common bond area.
2. The credit union membership bodies could set up a NI-wide organisation, so that funds could be mobilised and invested across Northern Ireland. This would mobilise funds at scale and could contribute more to the economic growth agenda.
3. Credit unions could collectively invest in approved and regulated social housing funds, as is the case in the Republic of Ireland. This could provide significant flows into the social housing sector.
4. Credit unions could deposit funds in experienced and regulated social banks such as Triodos, Unity Trust, Charity Bank and Ecology Building Society, asking for “best endeavours” to lend those funds within Northern Ireland. The banks could also be in a position to offer Community Investment Tax Relief accounts on deposits, which offer a reduction on corporation tax as well as an interest rate. A number of NI credit unions previously availed of this facility.
QB32. Do you feel that credit unions should be allowed to collectively invest in social projects, such as housing or infrastructure:
Answer: Yes, if the right infrastructure and support are in place.
In the Republic of Ireland, credit unions can invest in regulated funds that make loans for up to 25 years to Tier 3 Approved Housing Bodies, with small to mid-sized developments. Key controls include maximum loan to costs, planning permission granted before deployment, analysis of project suitability, minimum expected profit and a proven track record of the borrower.
The CU AHB Fund is a fund established by credit unions and available to all credit unions for participation. Credit unions invest through share subscriptions and the funds are invested in social housing through Approved Housing Bodies. The CU AHB Fund is authorised by the Central Bank of Ireland as a Loan Originating Fund and is a sub-fund of Multaque Funds ICAV, an Irish Collective Asset Vehicle. The Fund operates in line with the Alternative Investment Fund Managers Directive (AIFMD), implemented in July 2013, which introduced organisational, operational, transparency and conduct of business requirements on fund managers (AIFMs) and the funds they manage.
It is likely that a regulated fund structure would be required for major investment in housing or infrastructure.
QB33. Would you support credit unions collectively investing in local community development initiatives?
Answer: Yes, if the right infrastructure is in place.
1. A group of credit unions in a local authority area could set up a Credit Union Service Organisation (CUSO), employing experienced lenders to manage the service collectively.
2. Credit Unions could sub-contract the loan assessment and management process to experienced organisations, such as Enterprise Agencies or Community Finance Ireland.
3. The credit union membership bodies could set up a NI-wide organisation, so that funds could be mobilised and invested across Northern Ireland.
QB34. How important do you feel it is for credit unions to balance financial sustainability with collective social impact?
The balance between financial sustainability and collective social impact is crucial, with financial sustainability having priority. Credit unions are, by definition and in practice, social impact organisations. The failure of a credit union because of inappropriate financial practices has a huge impact on its common bond area. Well run credit unions will deliver social impact through its operations for the very long term.
QB35. What types of social investments would you like to see a credit union support?
The experience of Community Finance Ireland shows that sports projects (162) are most likely to be funded, followed by community projects (133) and social enterprise projects (27). Smaller projects, looking for funding between £10k and £50k, struggle to obtain funding and could benefit most from credit union support. In addition, many grant funded project need to raise match funding, which might vary between £10k (revenue projects) and £250k (capital projects). Collective investment would be very useful for major projects where the credit unions can see potential benefit for their common bond areas.
Conclusion
DTNI and RCN can see the significant potential for social investment in local, regional and Northern Ireland levels. There will be challenges in terms of developing skills and experience for very different levels of lending and investment. However, these risks can be mitigated by co-operation in the development of robust processes, training and development for staff, volunteers and boards and also working through Credit Unions Service Organisations. Lending and investment into local, rural and regional economies can support growth and deliver community engagement, employment and inclusion. Large-scale investment at Northern Ireland level should be managed within a robust regulatory framework and with a clear focus on social and economic benefit to the region. DTNI and RCN look forward to seeing the implementation of the modernisation project for the benefit of rural and urban, local, regional and NI businesses, social enterprises and their communities and people.
Appendix A: Development Trust Northern Ireland & Rural Community Network
Credit Union (Modernisation & Reform) Workshop Attendees
| First Name | Surname | Organisation |
| Aoibeann | Walsh | Rural Support |
| David | Gibson | Department for the Economy (NI) |
| Donna | McCloskey | NMT |
| Leeann | Evans | Invest NI |
| Lauri | McCusker | The Fermanagh Trust |
| Roisin | O’Reilly | Waterside Credit Union Ltd |
| Laura | McCauley | Ulster University |
| Karen | Mullan | Foyle Network Foundation |
| Samantha | Gallagher | Rural Community Network |
| Martina | Totten | Mid Ulster District Council |
| George | McGowan | The Old Library Trust |
| Margaret | Craig | DTNI |
| Teresa | Canavan | Rural Action |
| Eamon | McGuckin | Ormeau Credit Union |
| Dr Andrew | Grounds | QCAP Queen’s University Belfast |
| Carmel | Morris | Irish League of Credit Unions |
| Joanne | Clarke | Inner City Trust |
| Patsy | McShane | Ballinascreen Credit Union |
| Katelyn | Mason | Ulster University Student |
| Tiziana | O’Hara | Co-Op Alternatives |
| Charlie | Fisher | DTNI |
| Martin | Fisher | Irish League of Credit Unions |
| Jane | Kyle | DTNI |
| Sinead | Campbell | Advice NI |