The number of the member-owned lenders has fallen by 58 since 2019.
There are now just 183 active credit unions, according to a new report from the Central Bank of Ireland, the regulator for the sector.
This means the number of credit unions in the Republic has fallen by more than a quarter in the last five to six years, largely due to voluntary mergers.
They are coming together to create bigger entities in a bid to deal with rising costs and the regulatory burden on the sector.
Recently the Irish Independent reported that two large credit unions are planning a merger, in a move that will create the largest lender in the sector if it goes ahead.
Progressive Credit Union, which has members in most of north county Dublin all the way to Fairview in Dublin city, and Drogheda Credit Union, are in talks to merge.
The combined entity would have an asset size of €615m and would be regarded as a “super credit union”. It would have 120,000 members if the merger is approved by the Central Bank.
That planned merger comes at a time when the number of larger credit unions has been rising, according to the ‘Financial Conditions of Credit Unions, 2024’, published by the Central Bank.
The number of credit unions with assets of at least €100m has increased from 55 in 2019 to 70 near the end of last year.
Experts said that driving the trend towards consolidation was a growing awareness of the advantages of scaling up as a means to access additional resources, address concerns about viability and take advantage of opportunities to innovate and develop new products and services.
Long regarded as the sleeping giant of the financial services sector, the State’s credit unions now have total assets of €21.5bn, up 3pc from 2023.
Gross loans outstanding increased 12pc last year to €7.1bn.
Member savings are put a close to €18bn, a 3pc rise in the year.
Central Bank regulators said new loans issued in the year increased by 8pc to €3.28bn.
Personal loans continue to make up the majority of credit union loans, totalling €6.13bn or 87pc of total loans outstanding.
Credit unions have continued to diversify their loan portfolios, in particular increasing their mortgage lending, the Central Bank said.
Mortgage loans accounted for 10pc of loans outstanding, with a total value of €733m.
Close to 10pc of new loans issued by credit unions are now mortgages.
The average house loan issued for the financial year ended September last year was €155,000, while the average personal loan size issued was €6,000.
The release of the figures coincides with the annual conference of the Irish League of Credit Unions, a representative body.
Central Bank Director of Banking and Payments Domhnall Cullinan noted what he said was the continued positive trends in reported credit union sector data.
The Central Bank recently reviewed limits on the amount of lending credit unions can do, particularly for home buying and to businesses.
Mr Cullinan said: “The Central Bank’s expectation is that the proposed changes to the lending regulations, when implemented, will enable those credit unions that wish to, to undertake increased house and business lending activity in order to diversify loan books, improve loan to asset ratios and better deliver for their members.”
He urged credit unions to seize the opportunities the new lending rules will give them.
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