Church to Facilitate Ethical Alternative to Payday Loans
The Archbishop of Canterbury, Justin Welby, is determined to put an end to payday loans using the Church’s funds and the goodwill of the parishioners, despite some embarrassing blunders.
Justin Welby stated that he wishes to “compete” Wonga, one of the most well known payday lenders, out of business, by supplying an ethical alternative to borrowers. However, he didn’t realise that the Church actually has an £80,000 investment in the very company they deem immoral.
Granted, the Church’s money is invested in the company by proxy and not directly, which lessens the hypocrisy somewhat, but also ties the Wonga investment up with many other investments so that it is not easy for the Church to just sell the stakes off, now that they are trying to get rid of them.
The interest charged by payday lenders, sometimes in excess of 4,000% can lead desperate and vulnerable borrowers into bad money situations, the Archbishop seems to feel.
Sir Hector Sants, the former chief executive of the Financial Services Authority, has been tasked with producing a plan that is “action-orientated, not a philosophical debate about credit” and induce a series of credit unions using the Church to reach these desperate borrowers. “The purpose is to look at how the Church can encourage and facilitate the responsible use of credit savings.”
The hope is that the use of the Church to promote micro financing should help to stimulate the economy and help it to grow in an ethical way, using the Church’s “tremendous network” to reach those in need, and those considered too high risk by conventional lenders.