The main purpose of the Credit Union is to help Members achieve financial independence through the build-up of savings.

Our loan service underpins this by providing a means by which Members can satisfy their day to day financial needs without dipping in to their hard earned savings. Whilst the Credit Union does earn a small amount of interest from banks through the placement of surplus funds in a range of deposit accounts, the income from lending is its only significant source of revenue. The Credit Committee is responsible for exercising oversight of this loan service on behalf of the Board. The current committee has a membership of three – all volunteers drawn from the membership.

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I am pleased to report that during the year the Credit Union issued 3,093 loans to a value of £4.83m. Both the number of loans and the overall volume is slightly down on last year and mirrors the national demand for borrowing, which we attribute to the general lack of consumer confidence around at the moment. Nevertheless, we have still experienced a small growth in lending overall at just over 1%.

Whilst there can never be complete certainty in a lender’s mind as to whether or not the loan they are about to approve will be repaid, the Credit Union can support and help those decision makers by providing quality training, married to effective policies and procedures.

Whilst many Members will not be aware of this, Ormeau Credit Union has an excellent reputation within the movement for the high quality of its lending processes and procedures. Indeed its lending policy was taken and used by its affiliation body the Irish League of Credit Unions to be set out as the standard, so-called ‘capacity based lending model’ for the entire island of Ireland.

Whilst our loan book has continued to grow despite difficult market conditions, it is important to emphasise in that context that this has not been due to the absorption of significant additional credit risk. The temptation to artificially improve revenue in the short term by relaxing loan underwriting rigour is very real, but as you can see from our results and the explanations of credit risk that colleagues have outlined elsewhere in this booklet, bad debt is within the tolerance levels set by the Board.

This success also reflects the hard work and commitment of our lenders, just as much as the quality of the processes and procedures underpinning their work. Unsecured lending of the type that the Credit Union undertakes can never just be an exercise in box ticking. Neither is the type of ‘credit score’ based lending (which is so prevalent in mainstream lenders) appropriate for our business model. Credit Union lending is a complex and often intuitive process that can have a significant effect on Members’ lives and all our lenders know and understand the importance of the decisions that they make, both for the Credit Union and the Member. In our view such decisions can only be effective if they are made by individuals with the empathy, knowledge and years of experience that we are fortunate enough to have available to us at Ormeau.

3,093

loans issued to a value of £4.83m

Ormeau Credit Union’s lending policy

is the standard used by the Irish League of Credit Unions for the entire island of Ireland

Our team

Credit Union lending is intuitive and our team have the empathy and years of knowledge and experience available at Ormeau