With the building societies rapidly turning themselves into banks, the credit union remains one of the last bastions of mutuality.

You only have to look at the growth graph to see how phenomenally successful the union movement has been throughout Ireland. As the chart shows, in 1959 when the movement began, there were just three credit unions with 200 members and £415 in savings. Ten years later there were 180,000 members, 336 credit unions and £9 million in savings. Ten years later again, in 1979, there were 435,000 members in 456 credit unions and £111.6 million in savings;

Today, there are more than two million members and savings have nearly reached £3 billion.

Despite the credit union becoming an increasingly sophisticated organisation, moving into many more banking and insurance services, its success has been built on basic principles of self-help and co-operation and on the notion of regular savings.

The dividend payout on shares (every £1 saved equals a share) has been quite high in recent years with 90 per cent of credit unions paying between 3 and 7 per cent per annum. (Last year 12 per cent of unions paid between 6 and 7 per cent interest, regardless of the amount of savings. In comparison, banks were paying a fraction of 1 per cent on small demand deposit accounts and larger percentages only on substantial sums.)

Loans are made available to all members and repayments are based on a legal maximum of 1 per cent per month interest (12.6 per cent APR) on the diminishing balance of the loan.

Because this rate is higher than that currently on offer by retail banks or the building societies, some credit unions have been forced to lower the rate or provide higher rebates or dividends at year end, an issue that credit union leaders admit they will have to tackle in the lead-up to EMU and the lower interest rate environment.

With ordinary people becoming more prosperous and more financially sophisticated, credit unions have had to adapt and provide more services to members: there is now an ATM card being introduced in the larger credit unions for easy withdrawals of savings; loans are now insured against illness or redundancy; savings are further protected in death by the Life Savings Insurance which is free to members up to age 70. Up to twice the level of savings is paid in the event a member dies, but the actual payout is determined by age.

Members can also now buy home, motor and travel insurance from the ECCU, the wholly-owned insurance company of the League of Credit Unions, the umbrella body for the 533 credit unions.

The way annual share dividends (i.e. interest) are to be taxed in the future is one issue still unresolved between the credit union officers and the Government, but with the organisation growing into such a formidable force, it is one that the competition wants to see settled as much as the league does, though perhaps not for the same reason.