Archbishop of Canterbury Justin Welby

The Separation of Church & APR Rates

The War on Wonga rages on – and school is in session. The Archbishop of Canterbury’s latest frontline attack involves a proposal for the evils of payday loans to be taught in church schools, so as to avoid foolish borrowing decisions later in life. There are enough anti-lending Bible passages to substantiate his view, that’s for sure – but the question remains precisely when borrowers will be allowed to exercise the free will bestowed upon them to make their own life decisions.

What is particularly hard to stomach as a payday loan broker is the ongoing misconception that lenders in this industry promote long-term irresponsible borrowing. As with the vast majority of financial services, these loans are highly susceptible to misuse – and as long as press representatives and public officials continue to misrepresent short term loans, there’s no chance that borrowers will come to lenders for the right reasons.

As it stands, the Church of England doesn’t have the power to influence our country’s curriculum – but that’s not stopping Archbishop Justin Welby. While we wait for anything to come of this, the Archbishop admits he has some stuff to “work out”.

It’s our feeling that teaching children a sense of responsibility is far preferable to employing needless scare tactics in pursuit of the same outcome. Working in this industry, we believe that payday loans are a legitimate way to stabilise your finances in the short-term and should be promoted as such, rather than boycotted altogether – which is why we’ve got a few Commandments of our own. If future generations are given an understanding of responsible money management, they’ll be able to make use of lenders without the crippling fear of the worst case scenario.

As ever, Wonga are being used as a meatshield by other lenders in this space – which is likely due to their prominence. Last week, however, the company’s founder Errol Damelin announced that he’d be stepping down after years under the scrutiny of politicians and the public alike. This closely follows the FCA’s new, tougher lending regulations which were (quite correctly) predicted to force some of the big players out of the industry in the name of moral cleansing. At Instant Lolly, however, we’ve welcomed these changes and have relished the opportunity to publicise our own moral, customer-conscious approach to lending.

Those of you familiar with the ‘War on Wonga’ will have heard about the allegedly criminal interest rates associated with these loans. But it’s important to remember that figures can be skewed all too easily in the name of debate. Figures are almost exclusively based on annual lending, while Instant Lolly continues to preach the necessity for responsible short term borrowing. You’d be surprised how our interest rates compare with the unplanned overdraft charges you’ll find at major national banks when short term loans are actually the topic of conversation.

Let’s hope that, even in light of Damelin’s decision to back out of the industry, the Church of England’s £80k Wonga stake is still nice and safe.