The “targeted but significant changes” to the credit union lending framework announced by the Central Bank of Ireland in August take effect from today.

The lending limit for home loans has been increased to 30 per cent of total assets and the lending limit for business loans has been increased to 15 per cent of total assets.

The changes decouple the concentration limits for home and business lending, and remove the need for a business plan for business loans of more than €25,000.

Previously, credit unions could lend a combined 15 per cent of total assets in either home or business lending, a maximum of just over €3 billion.

Based on total assets of €22.05 billion, the sector now has the capacity to advance up to €6.6 billion in home loans and €3.3 billion in business loans.

Commenting on the changes, finance minister Paschal Donohoe said: “I welcome today’s changes to the Central Bank’s credit union lending framework. The new framework will allow credit unions to expand and diversify their loan books and provide more of the services their members need.”

Robert Troy, minister of state for credit unions, added: “The changes coming into effect today will help to diversify the Irish lending market. Allowing credit unions to increase their home and business lending will help to promote competition and deliver better outcomes for consumers.

“Credit unions have a unique national footprint right around the country, and access to community based financial services continues to be hugely important. That presence makes them ideally placed to offer choice and access to financial products for people across the country.”