Justin Welby, The Archbishop of Canterbury, has vowed to help grow Britain's 500 credit unions, who lend at nowhere near the astronomical 5,853% rate offered by the controversial payday lender.
Credit unions are set up by people who live in the same area, work in the same industry or are part of the same church. There are 500 in the UK and they encourage members to save and only borrow what they can afford to repay. Members pool savings to lend amounts of up to £3k to each other with low interest rates of around 1% per month – an APR of about 12.7%. Last year the government announced plans to invest £38m in the sector.
The Church of England leader, a former oil boss, warned Wonga’s chief executive Errol Damelin: “We’re not in the business of trying to legislate you out of existence, we’re trying to compete you out of business.”
This move has been backed by both the Chancellor George Osborne and business secretary Vince Cable and is a bold move by the Church.
But there are other options available to the industry, most notably crowd funding.
There are an estimated one million plus people trapped in multiple payday loans. We set up eMoneyUnion.com with this in mind and began to look for a solution to this financial tsunami.
We came to the conclusion that it could only be found by bringing together a group of fast moving internet gurus.
We looked to rebuildingsociety.com for its proven technology and the team’s understanding of the crowdfunding industry.
Their support has allowed us to set up quickly and operate cost effectively.
The CoE believes that helping to grow the financial co-operatives will help deal with the big social problems represented by payday lenders.
But it should also be pointed out that the ability to deal with big social problems and quickly is fundamental to the success of any crowd funding project.
In less than a year we’ve brought together a team of accountants, web developers and big number lending gurus to form a game-changing Peer to Peer loan platform to serve those excluded from the high street banks and building societies.
The BIG added bonus is that we are also able to deliver unrivalled returns to the individual social lenders.
Up to 12% p.a. fixed rate return, all loans backed by credit worthy Personal Guarantors, eProvision Fund for non-payment and no lender fees!
It’s very much a back to basics approach to lending, we are only willing to provide access to loans, if a borrower can get someone like Mum or Dad to support their application; remember the old days when you had to go into the bank with your Mum or Dad to open an account, never mind borrow some money!
There’s a definite need for socially responsible lenders and whilst we welcome the CoE’s move to rejuvenate the financial co-operatives we think they may need reminding that the industry itself is already looking at other options.
