Major €5,000 ‘low-interest credit’ boost for thousands – but there’s a catch

A NEW initiative has been launched and is set to be a major boost for low income families.

Minister for Social Protection launched the new scheme which will see access to low interest Credit Union loans made permanent.

It Makes Sense is a new personal microcredit scheme which offers small loans at low interest rates – but there’s a catch.

To benefit from the new scheme, you must be in receipt of a social welfare payment. The scheme offers loans of up to €5,000.

The scheme will see credit being provided to people on a low income and aims to reduce dependency on high-cost credit providers.

The majority of loans in the scheme are made through An Post’s Household Budgeting facility and this incurs a fee of 25 cent per transaction.

The Department of Social Protection are now aiming to ensure the continued availability of the scheme and has been paying these fees on a pilot basis since January 2020.

Due to its success, it was announced today that this would now be a permanent fixture.

Minister Humphreys said: “I am delighted to announce that the ‘It Makes Sense’, which is rolled out in partnership with our Credit Unions, is to be made permanent.

“This scheme is an important low-interest credit option for people in receipt of social welfare supports, who are in need of small loans and who may otherwise turn to high-cost credit providers.

“The payment by my Department, on a permanent basis, of the transaction fee for repayments through the Household Budgeting Facility will ensure the continued availability of this small but important loan scheme across Ireland.”

She continued: “I know from my days working in a Credit Union the challenges placed on families and individuals on low income who are in need of small loans.

“I welcome that over half of Credit Unions are offering this scheme, in over 280 locations, and that it is available to non-members as well as members.”

Humphrey’s said the continued availability of ‘It Makes Sense’ is an “important stepping stone” and an alternative to high-cost credit.

She explained that the new is an opportunity for people to “build up a good credit history” and move on to standard loans from their Credit Union.

Welcoming today’s announcement, David Malone, Chief Executive Officer of the Irish League of Credit Unions said the scheme highlights the roles Credit Unions play in Ireland.

He said: “I welcome the Government’s extension of the payment of transaction charges for Credit Unions participating in the Personal Microcredit initiative, known as the It Makes Sense loan scheme.

“This scheme was established in 2017 and is an alternative to high-cost credit providers.

“For me, this niche but important loan scheme also highlights the essential role Credit unions play in communities around Ireland.

“Credit Unions are in every community in Ireland and provide savings and loans to members on a not for profit basis.”