Deeply Embarassing? That's money.

So today there was a BBC story about Most Reverend Justin Welby and his embarassment over the Church of England investing funds that indirectly supported Wonga. The BBC article stated "The Archbishop of Canterbury said he was "embarrassed" and "irritated" that the Church of England invested indirectly in online lender Wonga."

It surprised me that this story was spun but some vendors (the BBC not included, in my opinion) as a way to smear Welby's plans to "compete Wonga out of business." He plans to do this by supporting credit unions, some of which charge 70-80% interest rates, as an alternative to Wonga et. al., who charge up to 6000% interest rates. The "embarassing" investment came about when the Church invested with venture capitalists Accel Partners, who led the Wonga fundraising efforts in 2009. Gavin Oldham, of the Church's Ethical Investment Advisory Group, stated that there was knowledge of their involvement with Wonga and "more could have been done with that information."

Well yes it could have. But the Church, like many other organisations and businesses, invests a certain amount of money with professional investors and they then place it where they see the biggest scope for profit. It becomes a sad-but-true fact that a lot of people who place money with professional investors simply put stock in (no pun intended...) their chosen company's ability to invest wisely for them and leave it there. The amount the Church actually invested in Wonga was, according to Welby, a rather paltry by context £75,000, a tiny fraction of the 5.5 billion Wonga actually received. The real lesson here is that if you're going to invest AND have steep moral concerns, you need to monitor and review your investments almost constantly to ensure you are not breeching your own code. Also, just because someone works for the Church's Ethical Investment Advisory group does not mean that they are not business men first and foremost. Wonga WAS a very good investment. If someone had given me £50k at the time I'd have been tempted by it myself. People who desperately need money and can't get it elsewhere go to Wonga (and others providing the same service, of course), are given money at an extortionately high interest rate, and hey, some of them do pay it back. By installments. For the rest of their lives...

The point is that high interest "pay day" loan companies are an investors dream. It's a guaranteed payout, provided the company doesn't lend too much to people who have nothing and goes under because it can't recoup losses. But as anyone who has ever been targeted by a baliff knows, having nothing doesn't mean having a bit - they'll take your TV, your car, any cash you have, I was once told a story about a baliff that walked off with someone's pedigree Pekingese (if this happened to me I'd have broken his arms well before he made it out the door, but my only investment personally is my love in my dogs). Unless you're living in a mud hut and you built that in the field you're squatting in, and you're sleeping in the nude because you have no clothes or blankets, nothing is safe. Hell, they might take your mud.

I don't really think Welby should be embarassed about the investment the Church made. He may be the face of CofE now, but he's not personally responsible for all the goings and comings of everyone and everything inside the massive organisation that is the British religion of choice. What he's doing now is fighting against an industry that targets the poor and desperate and will suck them dry if they don't give back what they took (plus interest). Now I don't think supporting credit unions who charge 70-80% is especially moral myself, but needs must and it's one of the very few alternatives available to people for whom Wongaquickquidloltakeourmoneywe'lltakeyourhouse is an option anyway.

Perhaps the Catholics should open up their own loans company. They're sitting on a good fortune in art and gold in the Vatican anyway. The Pope and Archbishop could create quite a stir by trying to out-Christian each other!