When it comes to payday lending, there is certainly a lot of controversy surrounding it. Payday lenders provide loans to customers who are struggling to make ends meet, however the interest rates are a lot higher than other forms of lending, such as credit cards and bank loans. The loans are only designed to be taken out for a short period of up to one month and are most popular for those who can’t get funding anywhere else. Most payday lending companies won’t carry out a credit check, which makes them more accessible to those who don’t have a good credit rating.
With over one million customers and a well-known advertising campaign, Wonga are one of the most well-known pay day lenders in the UK. Wonga not only have a significant presence in the UK, but have also expanded into other countries. In recent years they acquired a small Spanish lender, Credito Pocket who are a firm based in Barcelona. This new acquisition for Wonga looks like just one in a long line. They also recently bought BillPay, which is a similar company based in Germany.
The founder of Wonga, Errol Damelin is also a technology investor and has moved into a part time role within the business, allowing him to focus on other activities. He is also taking a more active role in planning the future of Wonga and particularly its international expansions.
This is not the only change in the management structure of Wonga as co-founder Jonty Hurwitz has also made the decision to leave the business. Errol will now take the role of part-time chairman, a change from his title of chief executive. With this move, he will be replacing Robin Klien, who provided financial capital for Wonga when it first launched in 2007.
Other changes in the management structure of Wonga include chief operating officer Niall Wass moving into a chief executive role.
Niall Wass has previously defended Wonga to critics who believe it to be an unfair system with inflated interest rates. His stance is that if lenders use it correctly i.e. that they pay it back straight away, it should not cause them any financial problems. It is when customers can’t afford to pay it back and end up rolling it over consistently, that the issues arise. He explained that the system is transparent and urged others to try and take out a loan to see how the process works. It is true to say that Wonga are very clear about interest rates on their website, customers are under no illusion about what they need to pay back if they take out a loan.
Unlike many other payday lenders, Wonga have an advertising campaign in place, which has helped them to grow and now with these international developments and changes in the management structure, it looks like there are many more plans afoot for the company.
If predictions are correct, it looks like Wonga might be worth billions of pounds in the future.