Church Action on Poverty loses battle to boycott loans company

Church Action on Poverty has accused NCVO of undermining the campaigning activities of many of its own members by refusing to stop taking sponsorship money from door-to-door lender Provident Financial.

Provident sponsors NCVO's MP secondment scheme, where MPs spend time with a voluntary organisation.

Debt on our Doorstep, a coalition of more than 150 groups, including CAP, challenged the umbrella body about the sponsorship earlier this year.

The coalition claimed the relationship breached NCVO's ethical funding guidelines on the basis that the interest rates charged by Provident are "extortionate", given the very low incomes of some of its customers.

NCVO invited both parties to present their case at a hearing in September, and found in Provident's favour.

Ben Kernighan, NCVO's director of membership services, said: "On the evidence presented to us, we considered that Provident Financial does not breach the ethical fundraising guidelines that have been agreed by the NCVO's board.

"In making our decision we took into careful account all the evidence provided to us."

In a letter to CAP explaining its decision, NVCO said the council considered the benefit to the sector of the work that Provident funds.

The letter said that because of its "broad mission and diverse membership", NCVO could not exclude all funders that individual member organisations might reject.

"We recognised that some NCVO members campaigning against poverty and financial exclusion would not take money from the company but, on balance, many would because they would recognise the lack of options for people on a low income."

Campaign co-ordinator Niall Cooper said Debt on our Doorstep was "very disappointed" by NCVO's decision.

"A significant number of Debt on our Doorstep members are members of NCVO, and for NCVO to say that Provident is the kind of company it is happy to do business with undermines the campaigning activities of many of its members."

He said the company has 40 per cent of the market for door-to-door lending.

"The sad irony is that these clients are typically those served by voluntary organisations," he said.

The Church of England sold its investment in Provident two years ago because of ethical doubts about the nature of the business.

Provident said its 1.6 million customers appreciate the access to credit it provides, the convenience and flexibility of the service, and the absence of default and penalty charges.

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