Once upon a time, Wonga was one of the most well-known and used online loan providers in the UK. But since 2018, the company has disappeared from the UK marketplace entirely, alongside a slew of other lenders to boot. Does anyone know what happened to Wonga and where the company is today? Find out as we examine what really happened to Wonga.
What Is Wonga?
Wonga was a short-term payday loan provider (definition here) to UK residents. People could go onto their website and apply for small loans and receive them quickly, often within the hour. Their speed of service and online accessibility made Wonga an instant hit among a population needing short term credit. The trade-off for easy accessibility and speed was often higher rates of interest than some other loan providers, but by no means all of them.
So what happened to them?
Wonga’s UK division went into administration in the final quarter of 2018. There are several reasons why the loan provider closed shop in the UK. The company’s successful business model was hit by UK legislation changes from the Financial Conduct Authority that capped interest rates on short term loans. This means Wonga was legally obligated to charge lower interest rates than the initial business plan forecasted, causing financial turbulence.
Some existing customers also made complaints against Wonga for being given a loan too easily, despite the required credit checks in place. However, many of these complaints were legally upheld and caused more financial problems in the form of compensation payouts. Even complaints that were not verified or upheld were costing Wonga millions of pounds within the complaints handling process.
When Wonga did inevitably collapse from legislation changes and complaints, they were still owed around £400 million from an estimated 200,000 of their customers. How much of this was paid back is unknown, but what is known is the closure of Wonga’s operation in the UK cost London more than 500 jobs.
Is Wonga Still Around?
Despite Wonga’s exit from the UK loan market, Wonga is still around and operating successfully in other jurisdictions, with South Africa being the most successful. While legally speaking an entirely unique legal identity from the old UK brand, a large base of customers who use their South African website’s revised lending practices and reformed monthly repayment structure to get out of financial difficulty in a more secure and sustainable way. It is also still operating in Poland.
Wonga has managed to rebirth its brand by splitting it into independent businesses that still use the iconic brand name and move away from the complaints in the UK thanks to a marketing agency called Fold7. Together they have cleaned up the business’s reputation and positioned the company as a different business with new ideas.
Can You Still Get Quick Loans from Wonga?
People living in a location where Wonga is still active can access quick short-term credit online. However, all credit will only be awarded after strict checks and verification. Thanks to investing in modern tech, Wonga can complete this without making you wait too long, typically sending you the funds within the same day.
Wonga is no longer an option in the UK, but residents here can still find short term loan providers online rather easily of course!