Member Article

Wonga earnings treble to £46m in 2011

Short-term lender Wonga.com has reported significant growth of 225% over the past year as revenues increased to £184.7m.

Net income rose 269% up to £45.8m, while the number of loans provided increased 296% to 2.46m for the year ending December 2011.

The company said that in 2011, Wonga more than doubled in comparison with 2010, after “record levels of customer satisfaction, its scalable technology platform and a surge in applications made from iPhones and other mobile devices.”

Wonga’s business has been a point of controversy since it established itself in 2007, and has its own dedicated website called OpenWonga.com, which is specifically for discussion over the firm.

The London-based firm has faced claims that it is exploitative of those struggling for money in the recession, as it offers Annual Percentage Rates (APR) of 4,214%.

New customers to the company can borrow up to £400 for 30 days, for which repayment would be £525.48, while existing users can borrow up to £1,000.

Wonga.com confirmed that it approved more than 2.4m short term loans last year, however it said the majority of first time applicants were rejected by risk assessments.

People taking out loans using mobile phone technology increased tenfold, and the company announced that almost 1,000 people a day download the “Wonga iPhone App”, which allows customers to receive a loan in under half an hour.

Errol Damelin, founder and CEO of Wonga, said: “We delivered another year of growth in 2011, by continuing to use our technology to meet people’s cash flow needs in increasingly tailored ways.

“We are building a financial services business for the 21st Century. Earlier this year we announced the launch of Wonga for Business and we also expanded internationally into South Africa.”

Wongaforbusiness.com is a subsidiary of the larger company, and offers short-term loans to small businesses.

A partner at Accel Partners, Sonali de Rycker, commented: innovative way. The 2011 figures are a testament to the company’s focus and ability to fulfil a real and growing customer need while adhering to the principles of responsibility and transparency.

“Wonga’s success is an inspiring example of the growth a disruptive business can achieve in a short period of time.”

This was posted in Bdaily's Members' News section by Miranda Dobson .