Wonga debate welcomed by Norfolk churches

The Archbishop of Canterbury’s intention to compete online lender Wonga out of business has sparked debate over the role the church has in helping the poor. Several Norfolk churches offer support to people in debt and the need for this service is on the increase.

Christian charities such as Christians Against Poverty (CAP) have seen increased use of their services and it is feared that the recent cap on benefits might only cause a rise in the use on payday loan companies such as Wonga who offer credit at a very high rate of interest.

David Reddington from North Norfolk office of CAP said, “People are struggling financially. They are open to more and more temptations to borrow money that they can’t afford to repay.”

David spoke on BBC Radio Norfolk at the weekend and he said how easy it is for people to borrow money, regardless of their credit rating. If they have a poor credit rating, the interest rate offered to them is higher. The loan comes without advice and with lots of consequences. “It may be a short term fix but might not help in the long term. In face quite to the contrary.”

CAP offer people in debt the hope and practical advice they need to get themselves out of debt and to manage their money better in the future. The support is offered in partnership with local churches, including Surrey Chapel in Norwich who have a CAP money centre where they support people to get out of debt.

Chris Murphy who is involved with CAP at Surrey Chapel said, "At CAP we welcome the Archbishop starting the debate about responsible lending and are committed to working  with credit organisations about the ways to identify those who are vulnerable and less likely to be able to meet the repayment terms. We want to stop credit being so easily available to such people. Furthermore for those who are in debt we can help them to manage their money - either through our debt service or CAP Money courses - and get them debt free without borrowing more, which is never the best solution."

The subsequent discovery that the Church of England indirectly invested in Wonga has caused embarrassment for the church but also highlights the difficulty in making ethical decisions whilst engaging with the real world.

There has been a call to regulate the lending industry and the events of the past week demonstrate that better information would help people make wiser decisions and look for alternative solutions to their financial problems.