Business

Church of England ends Wonga investment

  • 11 July 2014
  • From the section Business
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The Church of England has ended its investment in the payday lender Wonga.

The move ends an embarrassing situation for the Archbishop of Canterbury, Justin Welby, who last year pledged to try to put Wonga out of business by helping credit unions compete with it.

It later emerged that the Church had indirectly staked about £75,000 in Wonga through an investment fund.

The archbishop told the BBC he was "absolutely delighted" that the investment had ended.

When details of the link emerged last year, Archbishop Welby had admitted to being "embarrassed" and "irritated".

'Common good'

The Church Commissioners for England, which deals with the Church's investments, said on Thursday it was "pleased to announce" the indirect exposure to Wonga as part of its venture capital portfolio had been removed.

"At no time have the commissioners invested directly in Wonga or in other payday lenders," the commissioners' statement said, adding that the indirect exposure was "considerably less than 0.01% of the value of Wonga".

It said the commissioners believed venture capital to be "a good and useful instrument with significant potential to serve the common good", but that a number of "ethical investment changes" had been made.

These included tightening investment restrictions for direct investments, with new controls on indirect investments due to be announced later in the year.

Rates of interest

The statement added: "We no longer have any financial or any other interest in Wonga."

In an interview to be broadcast on this Sunday's Andrew Marr show, Archbishop Welby said: "I have been absolutely clear that I do not believe that the rates of interest charged by these companies are ethical and moral - they are legal but they are not ethical or moral."

As he does not sit on the Church's assets committee, he had no "legal right to intervene", he said, adding: "I can obviously apply pressure, encouragement, and I've tried to do that and I'm absolutely delighted that we are now out of Wonga and have taken no profit from it."

Details of the investment emerged in July 2013 shortly after Archbishop Welby said he had "bluntly" told Wonga boss Errol Damelin "we're not in the business of trying to legislate you out of existence; we're trying to compete you out of existence".

The expansion of credit unions would provide an alternative, he had suggested.

Wonga responded by saying it was "all for better consumer choice".

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