The pupils of one rural school offer the elderly in their locality a lifeline - building social housing and a day-care centre. It looks like a labour of love, writes Jennifer May.

The ingenuity and tenacity of generations of school students have dramatically improved the lives of the elderly in one rural community. Pupils of St Mary's Secondary School (now Scoil Thobail Sliabh Luachra) in Rathmore Co Kerry began visiting the area's elderly people about 30 years ago and discovered that many were living either alone, isolated from the community, or inappropriately housed in local psychiatric care.

With guidance from the school's principal Jerh O'Donoghue, they decided that if the Government could not provide a decent quality of life for their pensioners, they would do it themselves. Founding a co-operative they opened a laundry, which soon blossomed into other services. The school's current pupils are continuing the work.

"The students were committed from the outset," says Jerh O'Donoghue, who 30 years later, is still encouraging students to run the co-operative. "They questioned the accommodation available to older people, and when we said, 'that's all there is', their response was, 'can we not build something for them ourselves?' We decided to let them try." The first seven houses were built in 1993 - later, with Millennium Fund assistance, they built 16 more. In 1997, they applied for a loan from social finance company Clann Credo for further expansion.

"I heard about Clann Credo through the local Presentation Sisters," says O'Donoghue, "and applied to them for a loan. It was approved immediately with a favourable interest rate, enabling us to pay them back quickly."

Today the Rathmore Social Action Group (SAG) has responsibility for about 30 houses, a day-care centre, and three buses. It has dramatically improved the quality of life for pensioners in the area and is held up as a model of community development, with people travelling from throughout Munster to view their achievements: they have also won several awards for the development.

"Running this co-operative has given the students countless challenges, self-esteem and a social conscience," says O'Donoghue. "It has taught them that if you work as a team, the sky's the limit." A registered charity with a board of trustees, responsibility for SAG rests with those students between second and sixth year who choose to participate - this year there are 60 active members.

Chairwoman Noreen O'Leary (18) has been involved for four years now. "It's an honour to be chairperson of SAG," she says, "and [involvement is] very good for the students. Kids go into positions of responsibility and become leaders."

The Rathmore SAG is continuing to expand services - its latest project is a youth centre: "We have just got planning permission [for it]," said PRO Aindrea Kellegher (18), "and want to match facilities for the elderly. The centre will have a music room, health cafe and gym and is aimed at promoting the talents of the youth in the town."

The students also have a weekend rota for visiting elderly people, many of whom have become their friends.

"It's better than going to the pub," says Kellegher. "We have sing-songs and they tell us stories - many of them knew our grandparents when they were young - it's great fun."

"There is a great tradition of care which is going to stay with us for life," says vice-chairwoman Eileen O'Keeffe (18). "We hope to pass this on to younger members."

Social finance, as utilised by the Rathmore SAG, is a well-known concept in the US and other European countries, but is relatively new in Ireland. Social finance companies offer loans to organisations and individuals whose primary objective is development of infrastructure at a local level. This can be as ambitious as a social housing project or as simple as a small business creating employment. The main priority is not profit, although for the concept to work, a successful outcome is needed - the more money that is generated, the more projects can benefit from funding.

Clann Credo Ltd was established out of one religious order's desire to have lasting social effect on communities throughout the world. In 1976 the Presentation Sisters appointed Sr Magdalen Fogarty, formerly a secondary school teacher in Clonmel, as their bursar general. She says, "We could see the changing role of the religious in Irish life and wanted to do something appropriate, that would benefit communities in some lasting way, and ensure that structures we put in place could be carried on equally well by members of the laity."

With the backing of her order, she decided to fund a pilot project that would test the alternative investment model.

They backed a pilot project for job creation in Ballymun and the success of this venture led to backing from other religious orders (which prefer to remain anonymous), and ultimately, to the formation of Clann Credo in 1996.

Now a limited company, Clann Credo is unusual in that receives no State funding and it is self-sustainable - the more business it invests in, the more money becomes available for social causes.

"We are developing a plan towards assured sustainability," says Paul O'Sullivan, chief executive of Clann Credo. "Our social investment fund now stands at €8.7 million, 80 per cent of which is targeted at social direct investment, and is utilised to generate inclusive prosperity." Although most projects have been in Ireland, Clann Credo Ltd also builds alliances internationally.

Traditionally Irish religious orders took a much more hands-on approach to community work in the role of educators and carers in hospitals, schools and orphanages. Entering the world of finance might seem like an abrupt change - but Sr Magdalen doesn't think so. For her and the Presentation Order, taking the step into social finance was the natural thing to do.

"The idea behind the organisation comes from a commitment to social justice and the teachings of the Catholic Church," Sr Magdalen adds. "We would say that Clann Credo is based on the gospel."