The Archbishop of Canterbury, Justin Welby was left embarrassed yesterday after it emerged the Church of England has a stake in the payday lender Wonga.
The most reverend Justin Welby has criticised payday lending companies charging over inflated interest rates to the public and vowed to help expand credit unions in the United Kingdom. He went so far as to meet with Wonga’s fonder Errol Damelin to tell him about his concerns with the huge 5,853 per cent annual interest rates on short term loans.
Mr Welby has vowed to withdraw its interest from Accel Partners, a USA venture capital firm who helped Wonga to raise finance in 2009. The Church of England is looking to revise rules allowing it to invest in companies which make over 1/4 of its revenues from lending money at astronomical rates of interest. Due to the nature of complicated financial investing, the Church of England has inevitably invested unknowingly into the exact company it is against. Clearly the Archbishop of Canterbury believes the church could do better to help people who are most at risk of financial problems. Morally the Church has an obligation to speak out on the behalf of people across the country who are
Understandably much of the focuseed debate on high interest lenders such as Wonga, Mr Welby said that ‘the worst people are not Wonga’ and claimed his campaign was targeted more at loan sharks than professionally managed companies.
Payday lenders like Wonga are admittedly causing extreme hardship to people who unknowingly take out short term loans without the knowledge to understand how interest rates work or how much debt they could get themselves into.
Have you or someone you know taken out a payday loan? If yes, were you aware of the extremely high rates of interest?