We use a minimal number of cookies to enhance your browsing experience - you can change your settings at any time.
checkmyfile
The UK's only Multi Agency Credit Report

Take a FREE 30-day no obligation trial. Call 0800 612 0421 9am-5pm, Monday to Friday for help.




  
Forgotten Password? Not a Customer? Sign Up

Making loads of Wonga

Posted in 'Personal Finance' by Barry Stamp

20 September 2012

Payday loan provider Wonga, which started out in 2007, has reported revenues of £184.7m in its financial year ending 31 December 2011, an increase of 225%. Net income grew by 269% to £45.8m, generated from over 2.4 million loans advanced in that period.

Such success underlines the dearth of alternatives available to ordinary consumers when seeking short term financial support – it is generally quicker, and sometimes cheaper, to take a payday loan than to obtain an overdraft from an established bank account in current economic circumstances. On the other hand, the payday loan sector attracts much criticism, built upon fears that credit may be too easy to access and should not be allowed to grow out of control. Wonga rejects two in every three applications, which gives an indication of both the level of demand and of the quality of the applicant pool.

Errol Damelin, Wonga’s chief executive, has recently told of the company’s expansion plans to other financial products, saying, 'You will absolutely see Wonga in areas where the traditional financial services players don’t deliver good value. We’ll do other stuff like payments and savings. We’ll probably do mortgages at some point.' Wonga has already expanded into business loans via Wonga for Business, which provides loans to companies of up to £10,000 for terms of between one week and one year.

He says that the growth of payday loans is down to the array of distribution vehicles that are now available. “78% of our customers own a smartphone and over a third have an iPhone, plus we understand that unexpected needs for short-term cash don’t always happen while you’re sat by a laptop,” he says.

Barry Stamp is a co-founder of Checkmyfile and is a Chartered Banker and a Fellow of the Institute of Credit Management. He can be contacted at barry.stamp@checkmyfile.com.

Barry Stamp

Barry is a Chartered Banker and a Fellow of the Institute of Credit Management. He has a degree in Statistics and Business Economics from the Open University. Barry writes mostly on news from the worlds of banking and mortgages.

Barry is a co-founder of checkmyfile.

Related Articles

Bank of Mum and Dad give £30bn in 2014

The bank of Mum and Dad gave almost £30bn of direct financial support to their adult children last year, the most ever gifted.

The support included £8.3bn worth of home deposits, which was the most common form of financial help. Grandparents gave an additional £5.6bn, in a year in which rising house prices and living costs threatened to price many out of the housing market.

The report from Lloyds Bank Family Savings confirming that a shocking 4 in 5 adults aged 18 to 30 received help in some form from their parents, up from 60% in the 1980s. A third of UK adults say that they would be unable to afford to get onto the housing ladder without some help from their parents, with the number peaking at 55% of 25-29 year olds.

22 Jan 2015 by

Kelly Luff

 in 

Personal Finance

Full Article

Wealthiest 1pc own more than half of the population of the world

The gap between the wealthiest and the rest of the population seems to be ever-expanding, with the richest 1% predicted to own more than 50% of the rest of the world by 2016. This prediction by Oxfam is part of their research into the inequalities between those with the most money and the world’s poorest and coincides with the start of the World Economic Forum.

Oxfam’s Winnie Byanyima will co-chair the event, attracting politicians and business leaders from around the world. She says, "It is time our leaders took on the powerful vested interests that stand in the way of a fairer and more prosperous world.

"Business as usual for the elite isn't a cost-free option - failure to tackle inequality will set the fight against povert .....

22 Jan 2015 by

Kelly Luff

 in 

Personal Finance

Full Article

European Commission approves cheaper fuel for rural areas

The European Commission have granted a new scheme which could see remote locations receive a 5p a litre cut to petrol costs

21 Jan 2015 by

Jasmin Stopford

 in 

Personal Finance

Full Article

Accepted Payment Methods: VISA, MasterCard and Direct Debit

© Copyright Credit Reporting Agency Ltd 2000 to 2015. All Rights Reserved.

United KingdomAustraliaGive Me Credit United States

Customer Feedback