The Church of England today took the first steps towards becoming something comparable to a high street bank or building society with the launch of its own credit union.

The aim is to take on payday and other high-interest lenders such as Wonga by offering competitive dividends on savings and low-rate loans.

The foundation of the Churches' Mutual Credit Union is part of the Archbishop of Canterbury's drive to promote access to responsible credit and savings.

"It could transform the way retail finance is done in this country," Archbishop Welby said, adding that it will put an ethical basis back into the industry and help forge community links back into the sector.

The credit union was launched by leaders of member churches with a video of a ship being launched in the background, emotive music and the slogan: "God bless the CMCU and all who save with her."

It is currently open to about 60,000 church workers, charities, clergy and volunteers such as church wardens and members of the parochial church council, but will eventually be rolled out to every church member in the country. This could be more than one million people in the Church of England alone, with many hundreds of thousands more in the ecumenical partner churches; the Methodists, Church of Scotland, Scottish Episcopal Church and Church in Wales.

The national roll-out is being delayed to avoid directly competing with the 400 existing credit unions in the country, which ordinary church members are being encouraged to join.

The Church's well-established ethical guidelines which operate across all areas of its business mean the new credit union could one day stand to become one of the most trusted and respected lending institutions in Britain.

It represents the Church's commitment to battling poverty across Britain, and to doing all it can to reduce the gap between rich and poor.

Although this was not mentioned at the launch, it is possible to speculate that if church membership remains a criteria for saving and borrowing with the new credit union, it might even one day serve as an incentive to commit to church in the same way that successful church schools do at present.

Archbishop Justin Welby, a former oil company executive and the first Archbishop to come from a financial background, said at the launch during General Synod at Church House, Westminster that it was a "small beginning" to something that could end up being "quite significant".

He said: "It is putting our money where our mouth is." He also said it added to the ways in which the Church was engaging with poverty.

Rather than preaching at the problem, the Church is becoming part of the solution.

"Credit unions are essential. We are trying to build a new financial sector in this country," the Archbishop added. The new credit union was a "major step" in this direction, he said.

Canon Antony MacRow-Wood, president of the new credit union, said: "Of immediate interest to many, especially ordained ministers, will be our plans to provide a competitive car loan scheme (APR 5.54%). The Church forms an obvious community with many shared interests and as such it has a natural fit with the idea of a credit union. The recycling of capital within the community, not least for mission, will be of benefit to all."

Rev Ken Howcroft, president of the Methodist Conference, said: "The gap between rich and poor seems to be widening and leaving people without the resources to do new things, or even pushing them into crippling debt. When we recognise your interdependence we can share our resources to help each of us meet our needs."