Credit union money finally seems to have found a home

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It sounds like an ideal match between money looking for a house and houses looking for funds. Asset manager Gresham House leverages credit union funds to help build or acquire property for social housing across the state.

Credit unions, which have been desperate for opportunities to invest their members’ funds under strict Central Bank of Ireland rules, will invest up to €100m to buy or build up to 450 homes through approved housing organizations which, as always, are hunting for funding.

Repayment for credit unions and their members will come through the rental stream on properties over the next 25 years.

While the government’s Housing for All policy finally aims to comprehensively address the current housing crisis, funding remains a major stumbling block. Bank lending is still much tighter after the financial crash of 2008, so developers need to be more creative in how they finance projects.

Funds

This also applies to accredited housing organizations. And their commitment to a less profit-driven model makes it all the more difficult.

For credit unions, this is a welcome opportunity for an industry that is strictly controlled by its regulator – the Central Bank – in what they can do with members’ money. This is largely due to the voluntary nature of the movement.

In most cases, certainly before the recent rapid consolidation of credit unions, the management of member funds, investment and lending decisions were in the hands of enthusiastic volunteers with degrees of financial expertise ranging from a extensive industry experience to that gained in their credit. union role.

But, to fulfill their role, they must make members’ savings profitable. This has involved broadening the type of investments they should consider.

This fund, with its sanction from the Central Bank, appears to be a good solution for both parties to the agreement with a fairly low risk.

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