Wonga News Update: The Church and Wonga Embarrassment
Wonga news update: The Archbishop of Canterbury has expressed his embarrassment and displeasure at the Church’s relationship with online lending company Wonga.
It has become clear recently that despite the sentiments that Justin Welby made with regards to Wonga and the Church’s attempt to discredit the firm and hopefully remove them from the money lending market altogether by investing in other companies, the Church has in fact played a role in preserving Wonga’s presence on the market.
This confusion has prompted Welby to demand that the investment rules be put under scrutiny and Lambeth Palace have agreed to launch an inquiry into how the investment of around £75000 managed to be put through. The Church in total invested around £5.5bn so it was one of the smaller investments but still a substantial amount, enough to keep Wonga ticking along for a little longer certainly.
Welby, in an interview with the Today programme featured on BBC Radio 4, explained that the investment occurred because the managers whose responsibility it is to vet all of the possibilities, did not notice that the funds they had invested in one company had invested in their turn in Wonga and therefore the Church would also, however indirectly, be investing in the online money lending company.
Wonga News Update
When the Church looks to invest they follow the guidance of their Ethical Investment Advisory Group. They advise that the Church should not invest in any companies that obtain in excess of 3% of their income from pornographic material, 10% from anything relating to the military or 25% from gambling, alcohol and high interest money lenders. Wonga of course falls into this last category which is why the Archbishop has expressed such outrage at the investment choice.
In addition to these guidelines, the Church also looks to not participate in investments that fund companies who have what the Church would consider to be ‘unacceptable management practices’. The Archbishop has admitted that the 25% level indicated to be excessive income for companies like Wonga, may be on the high side and this will come under scrutiny in the review that he has requested.
The way the world has gone it is difficult to set strict guidelines on things such as this because so many companies are interconnected and therefore may provide be employed to provide something innocuous like underwear for the army but should the Church chose not to invest in that company? There are too many variables for rigid boundaries.
What happens next with regards to the Church and indeed Wonga remains up in the air. The former has to be able to adapt and function as the world evolves but it could be argued that is getting increasingly difficult for them to remain ethically satisfied.
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