Great Alternative to PayDay Loans
Posted on August 5th, 2013 at 1:28PM
There has been widespread media coverage over the past two weeks following the Archbishop of Canterbury, Justin Welby's expressed desire that the church would drive Wonga and other payday lenders out of business through competition.
An article in the Financial Times on 2nd August by Jonathan Ford, reminds us that it is not just those on the breadline who use payday loans. Many make use of the facility to afford a City break and the like before payday arrives. Yet it is the poorest who are most vulnerable and can quickly find themselves in debt when the ability to get quick cash is not matched with a realistic evaluation of their ability to repay it. Take a recent request, posted on our website for a man in Sheffield, to help repay a PayDay Loan Company to prevent legal action against him.
The Church is already responding to this need for good financial advice with many individual churches housing a Christians Against Poverty Debt Centre or a Community Money Advice Centre. Many of our participating churches are connected with one of these great charities and are therefore already equipping people with the skills they need to stay out of debt. When the church advocates meet a client who is in desperate need of an item they know they cannot afford, and for which they should not enter into any further debt, they have Acts 435 as a resource and a lifeline for their clients.
I am struck by some of the circumstances that occur for which an urgent Acts 435 request is posted. I wonder what the applicants would have done without help through Acts 435 - no doubt turn to payday lenders which are able to process the request and supply the money so quickly.
Vehicle repairs are a key need that arises which has an immediate effect on an individual's ability to keep working. A car or motorbike breaks down, or a bicycle is stolen, and suddenly, especially in rural areas, there is no way of getting to work. To lose a job could start a spiral down into poverty.
My husband recently took a job which required him to start on some days at 7am. The first bus arrived at 7:11 and he, and others, were told that to arrive late was not acceptable. His colleagues were left forking out for taxi fares ... we had the ability for me to drop him off at work, but if the car had needed a repair, we would have needed to act immediately. This is where people can be left high and dry and payday lenders seem the only option.
Take also a recent Acts 435 request, posted for a man who had been offered a job in Cambridge but needed to fund his own Disclosure and Barring Service (previously CRB checks) and travel costs to get to work. This must be a huge issue for people up and down the country - they finally get a job but then have to start working before receiving any income. How difficult if they have to start already facing interest charges to payday lenders coming out of their first pay packet.
I am convinced that a multi-pronged approach must be the solution to respond to the multiple needs of people in our country today. We see Acts 435 as a resource alongside many others to reach out to those in need. Now we just need more volunteers in more churches to step up to the challenge of providing a safe place for people from all walks of life to come and receive the love and support they need.