0 £0.00
This item was added to your basket
Search

Dear visitor,
You are viewing 1 of your 2 free articles


We’ve made wider, important changes to our print and online content to enhance the value of exclusive, insightful, discerning content we create every day. Support valuable editorial content by becoming a member of our Credit Club - register for free or choose a paid plan.

Register now or Login

Wonga investors agree £10m emergency cash injection

Investors in the UK’s biggest payday lender, Wonga, have provided £10m of emergency funds as the company seeks to deal with a surge in claims from former customers seeking compensation.


Calum   Fuller

Share on LinkedInShare on Twitter
Calum   Fuller
Share on LinkedInShare on Twitter

The claims relate to loans taken out prior to 2014, the company said, when controversy over its lending practices led to the introduction of a cap on the cost of borrowing.

 

Following the cap, in which the Financial Conduct Authority (FCA) introduced a cap of 0.8 percent of the amount borrowed per day on the cost of payday loans, Wonga was forced to change its business model, providing a greater range of lending products.

 

Wonga lost around £65m in 2016, but targeted a return to profit in 2017. It is not clear whether it met that objective as its annual report for the year has yet to be published.

 

Confirming the cash injection, a Wonga spokesperson said the company “continues to make progress against the transformation plan set out for the business”.

 

“In recent months, however, the short term credit industry has seen a marked increase in claims related to legacy loans, driven principally by claims management company activity.

 

“In line with this changing market environment, Wonga has seen a significant increase in claims related to loans taken out before the current management team joined the business in 2014.

 

“As a result, the team has raised £10m of new capital from existing shareholders, who remain fully supportive of management’s plans for the business.”

LATEST INDUSTRY NEWS STRAIGHT TO YOUR INBOX

READ NEXT

Grant Thornton CEO Romanovitch to step down

Grant Thornton CEO Romanovitch to step down

Credit Strategy launches Credit Week 2019

Credit Strategy launches Credit Week 2019

HMRC issues winding-up order against Patisserie Valerie subsidiary

HMRC issues winding-up order against Patisserie Valerie subsidiary

Credit Strategy
LinkedIn page

Did you find our website useful?

Thank you for your input

Thank you for your feedback

creditstrategy.co.uk – an online news and information service for the UK’s commercial and consumer credit industry. creditstrategy.co.uk is published by Shard Financial Media Limited, registered in England & Wales as 5481132, Axe & Bottle Court, 70 Newcomen St, London, SE1 1YT. All rights reserved. Credit Strategy is committed to diversity in the workplace.
@ Copyright Shard Media Group