PMC is the first government level personal micro credit initiative that brings together financial, social and public sector interests, working towards a common goal to achieve maximum social impact for citizens. The PMC offering is designed so that a person can avail of two and in certain circumstances three PMC loans and there is also a savings mechanism. The credit history built over the first two loans, coupled with small savings allow the borrower to qualify for standard loan products and other financial services. A significant learning from the PMC initiative is that unless there are triggers to assist a borrower to move from repetitive borrowing habits, it will not happen. The moneylender model does not allow a borrower to evolve. A person is stuck in a repetitive cycle of borrowing, repaying huge interest, borrowing again. Statistics from both the Central Bank 2013 survey and recent FCA UK data supports this statement. PMC is a path to financial inclusion.

As of this date of submission in 2018, the project has moved beyond pilot and evaluation stages and is being rolled out nationally to credit unions. Almost 50% of Credit Unions have signed up to participate in the scheme and work continues with this cohort on training, helpline support , marketing and communications. Strategies to recruit the remaining cohort of credit unions continue. Activities such as presentations and attendance at relevant events as well as feature articles in credit union publications are all aimed at raising awareness of the initiative and encouraging the individual credit unions to join the scheme.
Business and technology processes are regularly reviewed to make participation in the scheme more attractive. Improved data collection methods are also being explored.

Ongoing commitment and collaboration from all stakeholders is required. DEASP on legislation , CIB promotes citizen needs and MABS provides financial education expertise. An Post facilitates weekly repayments. CBI ensures alignment with prudential lending guidelines. Credit Unions are the delivery vehicle and integral to success. Representative bodies promote. Individuals continue to prove the concept. DoF contribute finance policy, NGOs refer borrowers and SFF project manage.

The ultimate beneficiaries of this initiative are the borrowers and their communities. Those on social welfare and low income, those with ties to moneylenders. On a €500 loan a person typically saves €130 in interest. That interest is saved or spent elsewhere in the community. PMC offers an opportunity to break the cycle of debt. Credit unions can leverage PMC to deliver on their ethos of serving the community. The commitment under the Programme for Partnership Government is being achieved.

272 credit union sites offer PMC having grown from 30 in the pilot. It is estimated that 8,250 PMC loans were written in 2017. Participating Credit unions describe it as a key tool to deliver to those with no credit history, defaults and no savings. It grows their loan books. The impact of the borrower has been described in focus groups as life changing and transformative, many borrowers hear about PMC via word of mouth as family and friends recommend it.

An independent study was undertaken by Amárach Consulting to assess the success of the pilot scheme, taking account of the views of the members of the IG, the participating pilot credit unions and participating borrowers. The study concluded PMC had a positive outcome from the differing perspectives and priorities of all three groups involved. Borrowers now feel they have moved from exclusion to inclusion, having been previously embarrassed to “walk into a bank with as little as €10” and “having been refused credit everywhere.”

Two key challenges exist:
1. Achieving national coverage as not all credit unions are signed up. This is an ongoing priority for the project working with each credit union individually. Political backing and acknowledgement from CBI and Government Departments play a key role.
2. How to get people to switch from using moneylenders to avail of the PMC alternative. A PMC focus group participant noted in April 2016 “[moneylender] loans are addictive. I sometimes get them when I don’t need them.” In further focus groups, March 2018 the importance of family influence on an individual’s borrowing habits could not be underestimated also, there is a confidence that you will not be turned down for a moneylender loan, that confidence does not exist with other lenders. This challenge is clear in looking at take up figures on PMC vs. moneylender customers. The reality likely lies in the supply side of the market where the environment of interest rates of up to 278% is ultimately challenged.

There are a number of elements critical to success:
1. Political support. This initiative has had particular vocal and varied political backing since early 2015. This gave it recognition. The support has been from a number of quarters and significantly includes a commitment under the 2016 Programme for Partnership Government.
2. Collaboration of all stakeholders. Each stakeholder involved is committed to achieving the PMC objectives. All dedicate time and provide leadership and guidance as the initiative is rolled out nationwide.
3. Financial commitment: CIB and SFF committed financial and capability resources from the outset. Further financial support was then given by ILCU. This caters for dedicated project resources tasked with co-ordinating stakeholders, product improvement, national rollout and addressing challenges.
4. Belief: This initiative grew from a belief that affordable loans should be available to all. Those involved are dedicated to making this happen.

The project has shown that with collaboration and the engagement of a diverse range of both public and private stakeholders working to a common aim, most obstacles can be overcome, or ways found to accommodate different views and requirements. In that context, the project serves as a model for tackling any cross-organisational project or problem space that involves a range of stakeholders with diverse roles and priorities.

An informal whole of government approach led to effective action in the area of financial inclusion and to the development of an alternative financial product available to one of the most vulnerable sectors of our communities. All involved in the project were committed to delivering a solution and proved that working together as a dedicated team delivers more than individual agencies, organisations and Departments working in isolation. This is something that could apply to the universal problem of credit exclusion that exists in every country.

A number of lessons have been learned:
1. The importance of having a product that people need and want
In 2012 the Irish Government were involved in an initiative on financial inclusion related to a basic bank account. The success of this initiative was low and take up was poor. What we have learned from PMC is that credit is a real need for those financially excluded. By leading with this product, individuals can experience the relevance of financial inclusion for them by giving them something that they need. Most PMC borrowers now have some form of savings coupled with the loan.
2. Stakeholder Collaboration
PMC requires multiple stakeholders, each to contribute so that it is robust and sustainable. Without this we would have failed. As noted above, each stakeholder has a role in play in providing the PMC solution both currently and to address challenges.
3. Continuous improvements
There is a continuous feedback loop through the project team on issues and challenges. It is acknowledged that PMC needs to continuously evolve e.g. inclusion of a savings element in 2016, process improvements between An Post and Credit Unions.
4. Credit unions.
Credit unions in Ireland have been going through a huge period of change with consolidations and pressure on business models. Also, the credit union structure is such that each credit union is an individual entity. Therefore each has to sign up to PMC separately. The IG and project team are working to understand best how PMC fits and what is needed from the project to enable credit unions sign up and to try where possible to deal with them as a collective.
5. Patience
Switching a person from high cost credit is a slow process. Feedback from PMC borrowers is that they will always be given the loan from a moneylender but do not have the same confidence in alternatives. It is a combination of education, providing the right experience and giving people the tools so that they can graduate to mainstream financial services.

Through the instigation of CIB, the project delivered a new financial product which provides a credit solution tailored to the most vulnerable and financially excluded, while meeting the regulatory requirements of the Central Bank. The scheme, now led and politically backed by DEASP and Government, is supported by all stakeholders in the Implementation Group and informed by its collective expertise understanding the needs of customers. It is considered to be a very innovative approach to providing an alternative access to low cost credit for those who heretofore had no option but recourse to high cost loans from moneylenders.
The PMC initiative is always looking to improve and to further understand the complexities around micro credit and the use of moneylenders. Lessons learned in other countries are important inputs for the project. Research conducted in 2017 by SFF and CBI on interest rate caps in other countries is currently being evaluated by stakeholders in the context of PMC.