The Social Economy Alliance welcomes Church of England's credit union expansion plan
- Competition as opposed to legislation is smart and sensible, and the CofE's lead must be followed
- Powerful institutions need to think creatively about how they wield their power in modern markets
- 'Best way to mend broken markets is to enter them and change them'
- Tens of thousands of community finance organisations in the UK need this spotlight as they provide best alternative to payday lenders
- Church of England to meet Alliance representatives to discuss further action
An influential new Alliance of organisations that have united to campaign for a more social economy in the run-up to the 2015 General Election today spoke out on the Church of England's plans to 'out-compete' Wonga, the payday lender. The Alliance is made up of thinktanks, charities, universities, housing associations, and social enterprise organisations including co-operatives.
Responding to the news, Ben Hughes, a spokesperson for The Social Economy Alliance and Chief Executive of the Community Development Finance Association (CDFA), said:
"The Archbishop of Canterbury, Justin Welby, has told Wonga that the Church of England wants to compete rather than legislate it out of existence as part of its plans to support the growth of credit unions as an alternative to payday lenders.
"This is a very smart and very welcome move - they're not simply lobbying for government to legislate, instead they've decided that the best approach is to encourage the growth of credit unions and other financial cooperatives to compete with payday lenders in the open market. The best way to mend broken markets is to enter them and change them for the better, or support those who do. Respected institutions like the Church Of England need to think about how they wield their economic and political power in today's world. In this case, direct action is the best way, and we hope many others follow their lead.
Hughes went on to say:
"This move will help to put community finance providers like Community Development Finance Institutions and credit unions, on the map. The UK has tens of thousands of them, already providing finance and banking services to people and families, particularly those in debt. As social enterprises and cooperatives, credit unions serve people not profit. They're democratically run and member owned."
"Too many people in Britain are falling into dark financial holes and payday lenders are exploiting those who are vulnerable. As the price of living continues to rise, alternatives are desperately needed."
The Social Economy Alliance, which was launched last month, is to press for the extended use of social enterprise and co-operative models to combat the rise of poverty, and support for business-methods that reverse the current trend of concentrating greater portions of wealth in a few hands.
The Alliance and the Church of England are in talks about future activity, and a Church of England's Mission and Public Affairs spokesperson said:
"In order to ensure that all members of society have access to affordable credit and other financial services, the development of credit unions and other forms of local finance is essential. The Church of England is committed to helping them grow, using the energy, skills and buildings at the disposal of thousands of churches across the country."