A church taskforce has concluded that there has been a “sea change in public and political opinion” about the use of payday loans, resulting in a fall of 68% from 2013.
Indeed in 2013, the Archbishop of Canterbury famously told online lender Wonga that is was going to ‘drive it out of business’ by actively encouraging and promoting the formation of Credit Unions. It was then discovered that the Church had indirectly invested £75,000 in the company, until it severed all ties in 2014. However, Wonga remains one of the largest short term lenders in the UK after changing a lot of its policies and procedures. There is still huge demand for unsecured loans and rates remain at record lows.
The report, led by former regulator Sir Hector Sants, focusing on responsible credit and savings which two years to complete has now published its findings. It was Archbishop Justin Welby who created the taskforce to establish why people apply for unsecured loans and where they go to do it.
“Although there are many other influences beside the Church, the Archbishop of Canterbury’s intervention has undoubtedly helped to galvanise broader awareness of, and support for, credit unions from churches and wider society and contributed to a sea change in public and political opinion around payday lending,” the report said.
The taskforce report also highlighted the need for increased financial advice in Churches and the importance of savings clubs in schools. Chief Executive of the Money Advice Service, Caroline Rookes said: “Managing day-to-day finances and improving financial education has never been so vital. The introduction of savings clubs in schools is a great way to encourage our children to talk and learn about money from a young age”
It is also worth noting that since 2013 membership of Credit Unions has grown by 13% with 123,000 new members in Britain.