THE Archbishop of Wales, Dr Barry Morgan, has lent his support
to calls by the Archbishop of Canterbury for churches to support
credit unions as a way of defeating payday lenders such as Wonga
Addressing members of the Church in Wales Governing Body in
Lampeter on Wednesday, Dr Morgan said that television
advertisements make payday loans "sound enormously attractive", but
he warned that "the interest rates . . . are horrendous, over 5000
He accused payday-loan companies of targeting those who could
not afford to repay the money, knowing that many borrowers "will
default on other creditors".
"One million pounds in payday loans will be made available to
Blaenau Gwent - one of the poorest parts of the country - in the
next year. . . The fact is, of course, that people are often
desperate for the basic necessities of life since wages are not
increasing, whilst the cost of everything increases."
Credit unions provided an alternative way "to lend to people at
a reasonable interest rate", but were "seen as something that
exists for poor people", Dr Morgan said. He urged all churchgoers
to pay £10 or £20 a month into credit unions to "remove the image
of them being poor people's banks".
"This would not be a gift on our part. We would get a
half-per-cent return on our investment, which is far more than you
get in the current accounts of most banks at the present time. More
importantly, money could be lent at reasonable interest rates, to
people who desperately need it."
Dr Morgan did not mention Wonga by name. He confirmed that the
Church had "no direct holdings in companies engaged in doorstep
lending, payday loans, or pawn broking", and that "checks were
being made with managers of third-party funds in which we have
holdings to see if the same applies."
There could be no "absolute certainty that there are no links
via third parties", Dr Morgan said. "Our position is, and our fund
managers are advised, that we would never knowingly invest in
them." He said that the Church's Ethical Investment Committee would
discuss the issue next month.
He called for public debates about economic justice, including
whether it was right that the chief executives of large companies
"now earn 280 times" the salary of their lowest paid employee.
Full reports from this week's meeting of the CiW Governing Body
will appear in next week's Church Times.