Invest in credit unions to stifle demand for payday loans, says Archbishop

(AP)

The Archbishop of Wales has called upon parishioners to invest in credit unions in order to provide people with an alternative to payday loans.

Dr Barry Morgan said that if everyone put just £10 or £20 a month into a credit union account, they would no longer been seen as "poor people's banks" and the market for pay day loan companies would be stifled.

"We can only remove the market for pay day loans if an alternative is available to lend to people at a reasonable rate and this is where credit unions can play a vital part," he said.

"Sadly, credit unions are not part of the fabric of British society as they are in Ireland, Australia, America and Canada. In this country, they are seen as something that exists for poor people."

Dr Morgan has been a member of a credit union for many years and noted that others who follow suit will gain a half per cent return on their investment.

"More importantly, money could be lent at reasonable interest rates, to people who desperately need it. Likewise, if we too fell on hard times, we could borrow," he said.

The Archbishop is in talks with credit unions to see how church members can increase their support to them.

"This Church, along with other churches at the minute, runs youth clubs, visits the elderly, provides food and shelter for the homeless, and raises money for the poorest parts of our world," he said.

"Becoming involved in Credit Unions might be a further way of helping families in desperate financial circumstances, to access loans at more tolerable interest rates, and help transform lives."

Archbishop Morgan, who was addressing the Church's Governing Body, called for a wider public debate on debt, lending and economic justice.

He said: "Can it be right, for example, that 30 years ago whereas the chief executives of large companies used to earn twenty times more than their lowest employee, they now earn two hundred and eighty times the lowest salary? The gap between rich and poor in our society therefore becomes wider and wider."

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