Church of England finally severs financial links with Wonga
Justin Welby had attacked Wonga, but 24 hours later it was revealed that the church had indirect exposure to the lender.
The Church of England has finally cut its financial links with Wonga, the controversial payday lender, it was announced on Thursday.
The church commissioners for England said that their indirect exposure to Wonga in their investment portfolio had been removed. They “no longer have any financial or any other interest in Wonga” and said that the church had not made any profit from its stake in the lender.
The archbishop of Canterbury attacked payday lenders in July 2013, claiming that they had destroyed lives and that he wanted to “compete Wonga out of existence”.
However, Justin Welby said he was very embarrassed when it was revealed less than 24 hours later that the church had an indirect investment in Wonga, despite having added payday lenders to its list of prohibited investments.
The Church of England held a £75,000 stake in the company through a complex series of venture capital funds. Critics of the £2bn a year payday loan industry have accused it of preying on the financially vulnerable for whom small loans quickly spiral as fees and interest are added on.
A statement from the church said that the commissioners had never invested directly in Wonga or in any other payday lender: “The indirect exposure of the commissioners through pooled funds represented considerably less than 0.01% of the value of Wonga. The church commissioners estimate that if they had had to sell their entire venture capital holdings they might have lost £3.9m to remove the exposure to Wonga, which was worth less than £100,000. The commissioners are pleased that another way forward has been agreed.”
The commissioners also said that they had tightened their restrictions on direct investments and would announce new controls on indirect investments later this year. A new position was being created in the investment team to ensure that its ethical policies were implemented, supporting the church’s ethical investment advisory group.
It emerged last year that the church’s investment managers were aware of the Wonga investment but had not passed it on to the archbishop or the commissioners.
Gavin Oldham, a member of the church’s ethical advisory group, also said at the time that the revelation was very embarrassing, adding: “The investment was very deep down in the fund, but a holding like that is very high profile and it is important to make people aware of it.”
Welby made the reference to Wonga in an interview in which he said he wanted to use the resources of the church to offer an alternative to payday lenders.
The commissioners said they would continue to support the church’s aim of promoting responsible credit and savings. Last year they gave £200,000 in start-up funding to the church’s new credit union, the Churches’ Mutual Credit Union.
- The Guardian,