A new report on credit unions from the Central Bank shows improvements in the sector's financial position.
The Central Bank also said there is evidence of a strong overall reserve position, continued growth in new lending and a sustained reduction in arrears.
Credit unions' loan to asset ratio - a key measurement of viability - has also started to reverse its downward trend, with a slight increase noted for 2018.
But the Central Bank said that challenges remain for the sector, as savings continue to grow at a faster pace than lending.
The resulting increase in investments has an impact on credit union surpluses, given low prevailing interest rates, it added.
Today's report shows that the credit union sector's total assets continue to rise and now stand at a record high of €17.6 billion.
It also noted that 54 credit unions with assets of €100m or greater now account for 57% of total sector assets.
Meanwhile, credit unions had €4.8 billion of loans outstanding at the end of September this year, up from €4.5 billion in September 2013.
The Central Bank noted that savings continue to outpace loans, with sustained annual growth since 2014. Total savings across the sector today amount to €14.6 billion.
The Registrar of Credit Unions, Patrick Casey, said that credit unions continue to encounter difficulties with income generation and return on assets constrained by low interest rates, low loan to asset ratios and high cost income metrics.
He said that focused engagement with the sector will remain a key priority for the Registry of Credit Unions for 2019.
"Through this ongoing prudential engagement, we continue to support credit unions in building strong core prudential foundations in the areas of governance, risk management and operational capability, so that they are better placed to achieve a sustainable business model and serve members' needs," he added.