Wonga And The Church

[jake-the-peg]

Is the Church of England in danger of suddenly becoming effective and relevant?

or is it just talk?

http://www.bbc.co.uk/news/business-23433955

[Hopkirk]

If the Archbish thinks he can put a company out of business by competing with it, he needs his head examining.

[factor-fiction]

There are already plenty of credit unions out there so I don't think that the church's involvement- if it gets off the ground- will make much difference. I am also not sure that the sort of people who would use a credit union are the sort who use Wonga.

[emmie]

i know he was in business before, but this is not what the church should be about.

[naomi24]

It flies in the face of Christian principles - but the church has a habit of ignoring those when it suits. Fundamentally the church is a business – and a very wealthy one – so it comes as no surprise that it’s venturing into new ground – and if it offers far lower rates of interest, there’s no reason it can’t succeed. I do think companies that prey on the vulnerable by lending money at extortionate rates of interest need to be scrutinised – and regulated.

[factor-fiction]

If there was a profitable market though for selling short term loans at a much cheaper rate to people with what is usually a poor credit record then I'm sure one of the many banks or companies such as Virgin would have spotted it and stepped in before now.

[bazwillrun]

didnt Jesus kick the money lenders out of the temple back in the day.

money lending is the devils work...unless of course we are the ones doing the lending !

yet more hypocrisy from the church

[emmie]

do you have to be a believer, or join the church before you are accepted, or can anyone ask for a loan, i only ask because with most things there is always a catch. I don't think they should be doing this, and i do believe companies like wonga should be regulated better or shut down.

[naomi24]

Em, If the church is going into competition against big companies, I doubt it very much. This is business! ;o)

[Octavius]

The EIAG has been in place for sometime and high rate lenders have always been an object of derision. This is one of the areas - perhaps not know or overlooked - that religion might have influence on national policy, since the EIAG have long set out to promote ethical investment and even provide ledning investment to companies involved in conventional weaponry!

[Canary42]

They'll be opening sex shops next.

[jake-the-peg]

I think factor - that's the point - it doesn't have to be a profitable business - it can be run as not for profit and massively under cut them.

Oxfam (and others) has a similar model - they run their shops as a business but the profits support their work.

I'm interested to hear more em but I don't think so - sounds as if the idea right now is to support existing credit unions with advice locations and support - more of a partnership rather than a stand alone CofE bank

[AB Editor]

Its the sort of thing the church should be doing (well, maybe not announcing it like that...).

I'm surprised at the negative comments.

[Octavius]

"They'll be opening sex shops next."

No, they are still on the unethical list, along with tobacco and alcohol!

[emmie]

that was rather tongue in cheek, didn't Jesus kick out the usurers from the temple..

[Gromit]

I believe he is advocating that the Church should invest in Credit Unions. These offer cheaper credit than high street shops and payday loan companies.

Investment from the Church will help credit unions expand and will take some trade away from these companies that charge high rates of interest to people who can least afford it.

He is Stockport Credit union's comparison for buying household goods compared with a Crazy Georges type shop.

http://tinypic.com/r/20pg7c/5

[emmie]

a credit card with Jesus face on the front, can see it now. Sorry that is also a bit of levity, no i don't think it is something that they should be involved in, even giving advice. I would rather all those who lend money, be it bank, mortgage company, or credit companies were much better regulated.
I get stuff from the bank on a regular basis, on taking our a large loan, even though i claim benefits.

[factor-fiction]

> "it doesn't have to be a profitable business - it can be run as not for profit and massively under cut them."

I agree, jake, that it can be run as not-for-profit but I don't believe it can 'massively undercut' the Wongas of this world. If these companies were making excessive profits I still feel other lenders would have stepped in and through competition driven the loan rates down. Credit unions are already available but haven't made much impact and probably attract a different client base anyway.

Good luck to the Church or anyone else who feels they can do it but I think it's a risky market - there will be defaulters and losses may be incurred, there is always the risk of bad publicity ("church hounds single mum of 7 to court for failing to repay £200 loan") and there is the risk of regulatory fines.

[Gromit]

The phrase he uses is

// He said the Church could do more to help non-profit lenders to compete with payday firms //

That does not mean the church will offer credit. It means investing in more ethical non profit lenders.

The church definitely should be doing this. It is helping the poor at its most basic level, helping them keep more of what little money they have.

[Hopkirk]

Will he send the bailiffs in for the defaulters?

[Gromit]

Yes. CCIs are sent to all defaulters.