Credit Unions are expected to write off up to €60m worth of loans this financial year to the end of September.
The figure equates to just under 1% of the total value of loans issued of €6.8bn but is almost three times the €23m in loan write-offs experienced in the previous year.
The Irish League of Credit Unions also says 9.44% of loans worth €640m, were in arrears at the end of June.
That represented an 8% increase on the situation three months earlier.
The financial year for the credit union movement runs until the end of September.
In a review of the financial year to September '09, the Irish League of Credit Unions says it expects the number of Credit Unions who do not pay a dividend to members to double to around 50 while others are set to pay a reduced dividend.
There are 508 credit union members of the ILCU on the island of Ireland, of which 405 are in the south. A number of larger credit unions in the south are not members.
League chief executive Kieron Brennon said the number of credit union members had increased but the amount of lending had fallen.
He said this was because credit unions were becoming more prudent and there was a greater reluctance amongst people to borrow money.
Around 2.95m people on the island of Ireland are members of a credit union. Between them they have just under €12bn in savings.
Provisioning for bad loans is expected to increase to inexcess of €400m, an increase of more than €100m on last year.
President of the League Mark Bailey said that credit unions fall under the supervision of the Financial Regulator and it was important that credit unions were are not tarnished and blighted by new measures being introduced to address failures in the banking sector.
