Church aims to “compete Wonga out of existence”, says Archbishop

“For the love of money is the root of all kinds of evil.” Thus spake the First Epistle to Timothy in the New Testament (later paraphrased, of course, by Horace Andy in one of the most iconic reggae songs around).

The Church of England has always had an interesting relationship with money, and has become increasingly involved in financial and economic affairs since the financial crisis.

As it happens, the CofE currently holds investments that were worth almost £5.5bn at the end of 2012, and are overseen by the Church Commission. Most of that is locked up in property – and in 2011, its property portfolio rose in value by 13.1% – but it also has investments in the stock market and global property funds.

In short, the Church is not short on money, however evil money may be. And right now, it is putting its money where its mouth is. The Archbishop of Canterbury, Justin Welby, has told Wonga founder Errol Damelin that he plans to take on pay-day lenders by “competing” them “out of existence”. (Read our interview with Wonga founder Errol Damelin.)

Welby told Total Politics that he plans to create “credit unions that are both engaged in their communities and are much more professional – and people have got to know about them”. He believes the plan could become a “decade-long process”, but the foundations are in many ways already in place.

The Church of England already operates credit unions for its staff through a network of around 500 co-ops, which provide small loans to its members. It will let the co-ops use CofE buildings to operate from – and as the number of churches and schools it has number around 16,000 spread across 9,000 communities, the Church actually already has a more extensive physical reach in the UK than the banks.

“I’ve met the head of Wonga, and we had a very good conversation,” the archbishop said.

“I said to him quite bluntly that ‘we’re not in the business of trying to legislate you out of existence; we’re trying to compete you out of existence’.”

Apparently Damelin’s response was sanguine and respectful. “He’s a businessman; he took that well,” said Welby.

Damelin later said: “There is mutual respect, some differing opinions and a meeting of minds on many big issues.

“On the competition point, we always welcome fresh approaches that give people a fuller set of alternatives to solve their financial challenges. I’m all for better consumer choice.”