Archbishop Wages Holy War With U.K. Startup
What do you do when a messenger of God hates your startup? The Church of England's leader, the Archbishop of Canterbury, has declared a holy war on online lender Wonga.
Archbishop Justin Welby told the British startup, which lends money at high interest rates to folks who can't get a bank loan, that he wants to "compete you out of existence," according to an interview with Total Politics magazine.
It's not the first time he's gone after Wonga. He has also said the startup violates the Bible's ban on usury. In the King James Bible, Chapter 23 of Deuteronomy forbids charging "thy brother" excessive interest on a loan, although sharking "unto a stranger" is OK. Go figure.
Lumping the six-year-old company with payday lenders, Welby said he wants to reinvigorate the U.K. credit-union system to provide an alternative to the kind of loans that carry annual interest rate percentages in the thousands. At first glance, Wonga's one of those, listing on its website that a 150-pound loan for 18 days would be charged an annual rate of 5,853 percent.
But CEO Errol Damelin said Wonga is different because it prevents customers from accruing enormous bills over long periods of time. He said borrowers know right from the start just how much they're on the hook for -- no hidden fees -- and helps those who need a bit of money quickly. Very quickly. Wonga can send you the cash within 5 minutes of approval, according to the company.
In response to Welby, Wonga published "Ten Commitments," not on stone tablets, but in newspapers and on its blog. Among its vows, Wonga swore to show the cost of a loan before you apply, run a thorough credit check for every loan and allow early repayments at no extra cost.
The church has been working to form its own lender for clergy and other employees, with a tentative grand opening in fall 2014. The congregation may be less thankful to hear last week that the church's pension fund invests in Accel Partners, the venture-capital firm that counts Wonga among the tech companies it backs, according to the Financial Times.
All of which leaves Anglicans asking: How would Jesus lend?