Less than 24 hours after the Archbishop of Canterbury, The Very Revd. Justin Welby, vowed to make the Church of England compete payday lenders out of existence it has been revealed that the Church holds more than £1m investment in one of the main financial backers of Wonga, one of the most visible payday lenders in the UK.
According to the Guardian, a spokesman for Lambeth Palace conceded that the Church of England’s £5bn pension fund, which has a policy that explicitly bans it from investing in payday lenders, holds an investment in Accel Partners, a US venture capital firm that is one of Wonga’s biggest investors.
Lambeth Palace said it had been “unaware” of the investment which is a “serious inconsistency” with its ethical investment policy, and comes after Welby’s personal attack on the immorality of Wonga’s business model.
Accel, which has also invested in Facebook and Spotify, was one of three funds that pumped $22m (£14m) into Wonga in 2009.
On Thursday, a spokesman for Lambeth Palace said: “We will be asking the Assets Committee of the Church Commissioners to investigate how this has occurred and to review the holding in this pooled investment vehicle.
“We will also be requesting the Church Commissions to investigate whether there are any other inconsistencies as normally all investment policies are reviewed by the Ethical Investment Advisory Group (EIAG).”
In its 2012 annual report the Church says its “new policy on high interest rate lending extends the exclusion on investment in doorstep lending companies to cover companies engaged in payday loans and pawnbroking.”
Meanwhile, the Archbishop’s initiative received an endorsement from non other than the Chancellor of Exchequer, (Britain’s Minister of Finance) George Osborne. The Chancellor said: “I want to see as many options for families as possible.”
The Business Secretary, Vince Cable, also lends his support to the Church of England initiative by saying, “I think the Archbishop of Canterbury has hit the nail on the head. We’ve got to have an alternative.”
The Archbishop has responded to the new development, saying, he was “embarrassed” and “irritated” that the Church of England invested indirectly in online lender Wonga during an interview with BBC 4.
“It shouldn’t happen, it’s very embarrassing, but these things do happen and we have to find out why and make sure it doesn’t happen again,” Archbishop Welby told BBC Radio 4’s Today programme.