- The archbishop has previously declared payday lenders like Wonga “morally wrong.”
- Archbishop Welby has endorsed a limit on the total amount a person can owe to any loan company.
- Welby said he was embarking on a “decade-long process” to get credit unions more involved with communities.
The Archbishop of Canterbury plans to hire payday lenders like Wonga by allowing credit unions to set up their businesses on church property.
Justin Welby, who also served on the Parliamentary Banking Standards Commission, said the Church was “putting our money where our mouth is” to help develop an alternative to high-interest lenders for those with low incomes.
Archbishop Welby told Total Politics magazine that he had already met Errol Damelin, the founder and CEO of Wonga.
“I told him bluntly that we are not in the business of trying to legislate to eliminate it, we are trying to compete to eliminate it,” the Archbishop said. “He’s a businessman, he took it well.”
The archbishop has previously declared the moneylenders “morally wrong”, comparing the industry, which has grown rapidly from being worth around £ 900 million to £ 2.2 billion in the last three years, with the usurers of the Old Will.
But this is the first time it has come up with plans to help 500 financial cooperatives, which already offer small loans, expand their reach using the Church’s 16,000 facilities.
He said he was embarking on a “decade-long process” to get credit unions more involved in their communities and “much more professional.” He has already launched a new credit union for clergy and church staff at the General Synod in York earlier this month.
Damelin said she always welcomed “new approaches” that offer people a “more complete set of alternatives for solving their financial challenges.”
“The Archbishop is clearly an exceptional person and someone who understands the power of innovation,” he said.
Archbishop Welby has previously supported a cap on the total amount an individual can owe to any loan company, a proposal supported by the Labor Party but so far rejected by ministers.
Short-term lenders have faced criticism from major political parties and are being investigated by the Competition Commission after the Office of Fair Trade found serious problems in the way the industry markets its loans.