Church of England mulls organising buyout of Wonga’s loan book, source says
The Church of England is said to be considering co-ordinating an effort to find a group of buyers for the loan book of failed pay day lender Wonga to prevent it falling into the hands of unscrupulous loan sharks.
A source close to the matter said it was highly unlikely the church would be directly involved in the purchase of Wonga’s estimated £400 million book.
Instead, it would work to bring a consortium of non-government organisations and philanthropists to organise a buyout, the source said, but that any plan was in a “very preliminary stage”.
The news comes a week after independent MP Frank Field called on Archbishop of Canterbury Justin Welby asking him to find “good people” to buy Wonga’s loan book.
Existing borrowers are thought to total around 200,000, and Mr Field said he feared they could be left at the mercy of money lenders and bailiffs who could purchase the debt at a knockdown price.
In a letter to the archbishop, he said: “Is there a possibility please of you asking the Church Commissioners quickly to assemble a consortium of good people with money who will attempt to buy those poor people’s loan books at a knockdown price?”
He said swift action by the church would stop a new lender “terrorising” the poor and would be “an example of the jubilee in setting slaves free of their debts”.
According to the Book of Leviticus, a jubilee year occurs every 50th year, during which slaves and prisoners are freed and debts forgiven.
Administrator Grant Thornton is running Wonga’s loan book while it looks for a buyer.
Mr Field said that such a purchase led by the Church of England could mark the beginning of a “people’s bank”.
He told the Press Association: “Wonga targeted people who are beyond the abyss.
“This is an ambulance rescue operation, but longer term we need to look at offering long-term credit, through a people’s bank, for those who are in urgent need.”
A spokesman for the Church of England said: “We are reflecting on what may or may not be possible in the months ahead regarding the repercussions following Wonga’s collapse.”
In 2013 the Archbishop was forced to admit the Church of England’s investment fund had invested indirectly in Wonga.
Although the sum was small – about £75,000 out of investments totalling £5.5 billion – he described it as embarrassing.
“It shouldn’t happen, it’s very embarrassing, but these things do happen and we have to find out why and make sure it doesn’t happen again,” Archbishop Welby said at the time.