Let us pay: churches could become peer to peer lenders
THE Church of England has announced a new initiative to promote responsible lending among its' congregations.
The Church Credit Champions Network (CCCN) will promote financial wellbeing and even encourage some churches in London and Liverpool to actively partner with local credit unions.
Speaking at the scheme launch earlier this week, Sir Hector Sants, the former head of the Financial Services Authority said that the network would also look into whether the Church could provide financial services directly.
"Could the Church community be encouraged to save and borrow within itself, using the opportunities provided by new technology, for example in peer to peer lending?" he asked.
Now, let us pay
It's not as strange a proposition as it sounds: the Church's Mutual Credit Union will start offering services to Church of England and Methodist church employees this Autumn.
Sants, who resigned as Barclays' Head of Compliance last year because he was suffering from exhaustion, has been heading up a task force looking at how the Church could "help support the growth of credit unions as part of a more competitive financial sector which encourages responsible lending and saving" since January.
"The banking sector requires cultural change," Sants said as he took up the post.
The church's interest in personal finance has undoubtedly been driven by the opposition to payday lending.
God vs payday lenders
Last June, the Archbishop of Canterbury strongly criticised usurious payday lenders which, he said in a speed at the House of Lords, were "becoming too big to ignore".
The Most Reverend Justin Welby later warned Wonga that the Church wanted "[not] to legislate you out of existence [but to] compete you out of existence".
The CCCN seems to be the next step in Welby's plan to provide real alternatives to payday loans as well as more general financial help.
Currently, according to research from the Competition Commission 60% of payday borrowers take the loans despite access to many alternatives and research from the end of last year found that 89% of people don't plan on ever taking out such loans.
Nevertheless, provision of other accessible loan options has been seen as a key way to beat the payday market.
"Forgive us our debts, as we also have forgiven our debtors"
As the BBC has reported this week, see video below, many churches already offer practical advice and help to members of their congregation who are struggling with money.
The CCCN scheme will shore up those efforts and, initially just in the dioceses of London, Southwark and Liverpool, train up volunteers to give real advice on finances like how to apply for a loan or make a budget.
Eventually, officials hope for an countrywide network of 'centres of excellence' staffed by trained money helpers.
There are 16,000 Church of England churches, Sants pointed out this week, five times more 'branches' than even the largest high street bank.
The Church's scheme is still in the very early stages, however.
Reading through the plan, it's a grab bag of different ideas: there's talk of promoting personal finance education in primary skills; of promoting credit unions or responsible lending in general; of links with debt services.
Clearly not all of these aims will be met and throwing everything at the wall to see what sticks is a risky strategy when the scheme's success is predicated on getting people involved and trained to offer financial help.
But then, the Church moves slowly: Welby has called CCCN a "25 year project" and, elsewhere, cautioned that building up the credit union sector will take ten to fifteen years.