Credit Unions are expected to write off up to €60 million 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 €6.8 billion but is almost three times the €23 million in loan write-offs experienced in the previous year.
The Irish League of Credit Unions also says 9.44% of loans worth €640 million 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 the end of this month, the ILCU says it expects the number of credit unions that 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 Republic. A number of larger credit unions in the south are not members.
ILCU 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 2.95 million people on the island of Ireland are members of a credit union. Between them they have just under €12 billion in savings.
Provisioning for bad loans is expected to increase to in excess of €400 million, an increase of more than €100 million on last year.
ILCU president 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.
