The slow response by some lending institutions to the increasing casualisation of the workforce is causing problems for many self-employed, contract and freelance employees. Banks and credit institutions are still judging loan, mortgage and credit decisions on criteria suitable to salaried employees.

The recent FAS/ERSI Manpower Forecasting Studies predicted: "The total number of temporary employees is predicted to increase by some 36,500 from 103,000 to 139,500 between 1997 and 2003, an increase of over 35 per cent. In terms of the share of total employment, this represents a fairly modest increase in the proportion of temporary employees from 9.4 to 11.2 per cent over the period in question."

The Republic is part of a worldwide trend in which engineers, computer programmers, construction workers, financial service employees, journalists and others work on short-term contracts. Unfortunately, the majority of lending institutions are not keeping pace with these workforce changes.

A Family Money reader from Dublin who is a freelance employee found some banks were more willing to discuss a mortgage with her than others. Her bank for 10 years, AIB, was hesitant to grant her a small mortgage and the Bank of Ireland refused to meet with her. But National Irish Bank (NIB) was very helpful and willing to take her track record with AIB, curriculum vitae and portfolio into account.

Like many lending institutions, NIB's borrowing policy requires three years of financial statements to confirm the customer's ability to repay, says Mr Jim Deeney, divisional manager for retail banking. However, the bank is aware of shifting workforce trends.

"Society is changing greatly and we're seeing a move away from salaried employment to contract employment and self-employment. That poses opportunities for people like ourselves, for bankers. We judge every case on its merits by looking at the individual concerned, their track record with the bank or another bank, credit standing and existing asset liability position," he said.

The bank has adjusted its policy to factor a customer's skills and experience into the equation. "Particularly in the case of the self-employed, we look at things like a CV and what they have achieved as an individual," says Mr Deeney.

Although NIB is sympathetic to the problem it may not be fully maximising this new opportunity, he said.

Allied Irish Bank (AIB) believes its customer base reflects the Republic's changing workforce demographics, according to a spokesman. "Each application is looked at on its own merits. Many of the contracts and freelancers tend to be higher earners. It's really the establishment of the relationship with the bank that matters. We look at the length of relationship and the capacity to repay," he said.

AIB says decisions are left to the individual lending officer. "If they don't succeed the first time they should go back and talk to someone else in the branch," said the spokesman.

Bank of Ireland's policy is to use the same criteria that applies to PAYE circumstances, says Ms Susan Osborne, strategic planning manager for mortgages. "We examine the sort of work they do, qualifications, demand for these skills and the employment track record. For self-employed we usually ask for three years of accounts. In today's environment we're seeing more start-up situations so we examine it from a business risk point of view."

Generally speaking, the bank says it will take a customer's relationship with another lender into account.

Small business owners, who are considered self-employed, may also experience difficulty when seeking loans. "Sometimes you'd have the unusual situation where a business owner asking for a mortgage wouldn't get one but their employee would. Therefore, it's a case of looking at each individual's circumstances," said NIB's Mr Deeney.

Organisations representing small business owners or the self-employed say that this is increasingly becoming a problem for a proportion of their membership.

Mr Frank Mulcahy, director of the Irish Small and Medium Enterprises' Association (ISME) believes there may be creative solutions to this problem. One possibility is the establishment of a joint venture between the county enterprise boards and banks to assist small business owners seeking loans.

Barring this option, groups of small business owners should form mutual guarantee schemes like those popular across the European Union. "It's like a credit union focused on micro businesses," he said.

Mr Fergus Whelan, industrial officer with Irish Congress of Trade Unions (ICTU) recognises that lending policies will change slowly. "An element of job security is essential in today's labour market especially when it comes to securing loans or credit to provide yourself with a home or the other necessities of life," he said.

Some employers with a high number of casual workers will provide letters vouching for the continued employment status of casual workers. Others will only provide verbal, rather than written assurances, to credit lenders.

Of course, banks are not the only source for loans. Credit unions are a good alternative for those hoping to establish a credit record. Mr Pat Fay, head of monitoring services for the Irish League of Credit Unions (ILCU) says they offer membership to those meeting their requirements, which are usually area or employment based.

Once a member "persons can apply for loans if they have some savings or repayment record with the credit union," he says.

Often timely repayment of a first loan for a small amount, such as £500, is enough to establish this record. "It would be advisable that members would regularly save and if the need arises, borrow even small amounts from the credit union to create that record.

"Credit unions will consider every individual application on its merits and will look for reasons as to why they should approve loans," he says. Credit unions tend to be more flexible with repayment amounts and term of loan than banks.

Some new business owners may already have experience of borrowing from credit unions through government schemes. "The credit union will consider loans from people wishing to avail of the financial backing and guarantees that the back-to-work scheme provides," says Mr Fay.

"In addition, credit unions have grants available to assist credit union members in establishing worker co-ops for the purpose of creating employment."

This flexibility comes at a premium as credit union interest rates are currently higher than those offered by banks.

The Republic's increasingly flexible workforce will need banking and lending facilities that recognise and cater for its needs. Until these changes occur, temporary workers will find that each financial company and lending officer differs in approach.