This first ran in the Huffington Post.

The payday lenders are front and central once again.  After his assault on the energy companies Ed Miliband has switched his attention to another group with few friends and declared tax war on payday lenders.

Wonga is at times a little like an embarrassing relative.  It can make us cringe but secretly perhaps we’re all glad it’s there.

For a lot of us, payday lending galvanises our moral outrage.  It gives us something to kick against. It is the business we love to hate, but perhaps we are being unfair?

Wonga did not create the market in which it thrives.  It simply spotted a market opportunity and capitalised on it.

Put in a less charged way, it identified a group of people that were not being well served by the existing financial services industry and provided them with a service they were looking for.

Before the rise of payday lenders that customer base was still there. Many within it were as vulnerable then as they are now, but they were either served differently or not served at all.

For sure, for many people the vicious circle of escalating debt has not gone away.  Nevertheless, if we’re going to blame the payday lenders for letting them down, shouldn’t we first blame everyone else that has done so?

This would cover the rest of the financial services industry, in many cases the social services system and, some might argue, government and society as a whole.  In other words, payday customers were already being let down until the loan companies stepped in.

The Archbishop of Canterbury is encouraging alternatives to payday lending, hoping that credit unions and the like will be able to innovate the payday lenders into oblivion.  No doubt, should that happen it will be widely applauded, and for good reason.

But let’s be clear, if that does happen, it will be because the payday lenders inspired innovation in a market which was previously not served at all.