Church of England’s links to loan company
The Church of England holds more than a £1m investment in one of the main financial backers of Wonga, one of the biggest payday loan companies, the Archbishop of Canterbury admitted today.
The revelations came less than 24 hours after the Archbishop launched a scathing attack on Wonga's business model. He said that he wanted to compete Wonga "out of existence" by expanding the remit of the Church’s credit unions.
Most Rev Justin Welby has long been a vocal opponent of payday loans in Britain but he was forced to concede that the CoE’s £5bn pension fund has an investment in US venture capital firm, Accel Partners – one of Wonga’s largest investors at the time of its launch in 2009.
Industry expert Justin Urquhart-Stewart of Seven Investment Management told Morning Ireland earlier that Archbishop Welby is “absolutely furious” that his well intentioned investments have now been linked to “loan sharks with ties on”.
“It’s always very important that if you are going to attack an area that you are not already part of an organisation that is already supporting it.
“It’s an indirect investment but nonetheless it is extremely embarrassing for him”
The plan of the Archbishop was not to actively push the payday lenders out of business but to compete them out of business by making sure that the CoE could help credit unions provide more cost effective loans.
Credit unions may not be as instant and as flexible as payday loans but as Urquhart-Stewart remarks, “frankly instant short-term cash at rates over 4000% shouldn’t be given out.”
CoE’s investments are made with a strong ethical policy and clear specifications that bans firms involved in things like payday loans. Furthermore, the archbishop has previously worked in the oil business and on the Banking Commission so he’s regarded as being relatively financially literate for a senior cleric.
Urquhart-Stewart says that “An investor has to do their due diligence.”
“If you want to invest in a private equity firm you need to know the sort of investment that they themselves are going to be investing in. There is an awful lot of egg on face here.”
A church spokesman has said an investigation would be launched.