The Archbishop of Canterbury and leader of Anglican Christians worldwide has announced that the Church of England would take up the business of providing small loans for people with a view to running existing pay-day loan companies operating in the United Kingdom out of business.
The entire payday lending industry, worth £2bn, was referred last month for a full-blown investigation by the Competition Commission after the trading watchdog uncovered “deep-rooted” problems with the industry.
The Most Rev Justin Welby, who used to work in Nigeria as an oil company executive, wants to force these pay-day loan companies out of business by expanding the Church of England’s credit union plans.
Mr Welby said he had delivered the message to Errol Damelin, chief executive of Wonga, one of Britain’s best-known payday lenders, during a “very good conversation”. “I’ve met the head of Wonga and we had a very good conversation and I said to him quite bluntly ‘we’re not in the business of trying to legislate you out of existence, we’re trying to compete you out of existence’,” he told Total Politics magazine.
“He’s a businessman, he took that well.”
The Archbishop’s announcement was made after he launched a new credit union for clergy and church staff earlier this month at the General Synod in York.
Mr Welby, who has also served on the parliamentary Banking Standards Commission, has said he plans to expand the reach of credit unions as part of a long-term campaign to boost competition in the banking sector.
There are also plans to encourage church members with relevant skills to volunteer at credit unions.
The Archbishop pointed out that that the Church of England has 16,000 branches and 9,000 communities – more than banks.
The Archbishop went on to say, “We’re putting our money where our mouth is, we’re starting a Church of England staff credit union. You’ve got to have a corporate interest body to identify who’s members of the credit union. We’re starting one of those so we’re actually getting involved ourselves. We’re working steadily with the main trade bodies for the credit unions.”
Mr Damelin said: “The Archbishop is clearly an exceptional individual and someone who understands the power of innovation.
“There is mutual respect, some differing opinions and a meeting of minds on many big issues.
“On the competition point, we always welcome fresh approaches that give people a fuller set of alternatives to solve their financial challenges. I’m all for better consumer choice.”
Urnaija wonders if Nigerian churches, especially the Pentecostal ones, will borrow a leaf from the Church of England and make affordable credit available to Nigerians.