A midlands community credit union has set a challenge for the rest of the movement by announcing it will cut interest rates by an annual 3 per cent from the end of this year.
Tullamore Credit Union in Co Offaly, the second-largest community credit union in Ireland, claims the cut in interest rates is a first in the history of the movement.
Mr Tom Martin, president of the credit union, said the cut would effectively result in a 25 per cent reduction in members' interest bills. The reduced rates would apply to all existing loans as well as new loans next year.
In addition to the cut in the interest rates from 12 per cent to 9 per cent, borrowers will also benefit by a 15 per cent rebate of interest paid on loans in the year to September 1997, Mr Martin said.
This, with the proposed annual dividend on members' shares, would mean the credit union would inject over £2.1 million into the local economy in the current year, he added.
The credit union was set up in Tullamore in 1963, and this year its accounts show it has assets totalling over £44 million and an income of just over £4 million.
Its general manager, Mr Dennis Daly, said the credit union was anxious to see its members getting the best value possible. The magnitude of reduction gave an indication of its commitment and it wanted to convince people they should be borrowing from their credit union.
The decision to cut interest rates, he said, was based on opportunities presented by the new legislation which came into force on October 1st.