A CREDIT union in Co Donegal with a loan book of €15 million has hit out at customers who are using the recession as an excuse not to repay their loans.
Buncrana Credit Union yesterday accused a number of people of “abusing their membership and their community” by failing to honour their debts.
Sources close to the institution say it is becoming exasperated with debtors who still maintain a luxury lifestyle but refuse to pay back as little as €20 a week.
“We’ve heard of cases where people are being rung up about their debt and their children answer the phone saying, ‘sorry, they’re on holidays’,” said one member yesterday. “And it’s luxury holidays abroad we’re talking about, not a day trip to the beach.
“Then you’ll have a small saver with a tiny loan who would be on blood pressure tablets if they missed a payment.”
The source added: “Maybe they don’t realise it, but this is their friends’ money, their neighbours’ money.”
The credit union’s chairman, Danny McGeehan, confirmed that the institution was having problems with a “small number” of debtors.
It is understood that fewer than 100 debtors, owing €20,000 or less, are causing most concern. A number were involved in the construction industry but have since felt the effects of the downturn on their businesses.
A person owing up to €20,000 to the credit union, who cites financial difficulties, may be asked to pay back as little as €80 a month.
“It is sad to report that a small number of members who are able to pay are simply abusing their membership and their community by failing to make an honest effort to repay their loans,” added Mr McGeehan.
He said the institution had recently begun taking legal action against several people, with more cases to follow. But he insisted that borrowers who made genuine efforts to repay need not worry.
“Members are well aware that, if they get into financial difficulty, their credit union staff are always there at the end of a phone or better still in person, ready, willing and able to help them agree a way out of their difficulty.”
Buncrana Credit Union has been in operation for 40 years. It has almost 13,000 members with combined savings of €49.5 million and an outstanding loan book of some €15 million.
It employs eight staff, two of whom were put on full-time credit control duties as of yesterday.
The institution stressed that its loan book was performing well overall and that it remained “strong, stable and open for business”.