MEMBERS of congregations in
the diocese of Southwell & Nottingham have deposited more than
£35,000 in two local credit unions over the past year. The diocese
is now exploring a more ambitious model of philanthropy to run
alongside. This is likely to be launched in the autumn.
"We very much support
Archbishop Justin's desire to help non-profit lenders compete with
payday firms," the chief executive of the diocese, Nigel Spraggins,
said on Monday.
In September 2012, the Revd
David McCoulough, director of Partnerships and Mission, set up a
model of encouraging 100 people to put £100 into a credit union and
leave it there for at least a year.
"There's a great need out
there. It's not about giving your money away, but putting a bit of
it somewhere else, where it can be used to benefit society," he
said last week.
The scheme has the support
of the Bishop, the Rt Revd Paul Butler. "There is real concern
about payday loans, which charge very high interest rates, sadly
legally," he said. "There is also real concern about loan sharks
exploiting the poorest."
The scheme attracted fewer
than the target number of 100, but those participating deposited
larger sums. Both credit unions, the Nottingham and the 2Shires,
had been keen to see how they could work with churches, Mr
As an experiment this coming
autumn, representatives have agreed to be present to sign people up
after a church service at which Mr McCoulough is speaking, and they
will also have a presence at the diocesan conference in
The credit unions pay an
annual dividend of one per cent to savers, and charge interest on
their loans, equivalent to those for a store card. "They have to
make some money to exist, but the point is, people who come and
borrow £500 over a year will pay back about £560. Otherwise,
they're looking to £900-plus, and no choice of going anywhere
else," Mr McCoulough said.
Corporate members of credit
unions can put in up to £20,000. The diocese is now exploring a
20:20 scheme, whereby 20 church councils or trust funds put in such
larger sums. Already being pioneered in Nottingham is a
philanthropic account with the Nottingham Building Society, whereby
four fixed-rate savings accounts come with a choice of interest
If savers choose the
philanthropic rate over the fair-value interest rate, the
difference supports a local homelessness charity, Framework, in its
strategy of raising £10 million through social investment to
provide 150 units of move-on accommodation for homeless people. It
partly offsets the cost of a loan of £800,000, which has been lent
to Framework on commercial terms.