WONGA REJECTS NEW LOANS IN EFFORTS TO STAY AFLOATDate: 2018-08-30
Sky News reveals that the struggling payday lender, Wonga, has stopped taking new loans in efforts to stay afloat, however, if you are an existing customer you may continue to use the service to manage your loans.
Wonga has been working on avoiding the risk of collapse within weeks, and it was confirmed on Thursday on the Wonga website that it is no longer accepting applications for new business. Wonga's near business collapse has been blamed on a combination of tighter regulation and a surge of compensation claims relating to its past lending. Wonga was recently reported to have an emergency 10m pound cash injection from one of the owner's, Balderton Capital, to keep afloat.
Even though Wonga has shifted away from short-term credit to flexible loan packages to improve its image, Wonga is still at risk of a Business Service group, Grant Thornton, to take over as administrator should it collapse. Such a take over would threaten over 500 jobs.
In contrast, banks have reported steady lending and a large profit growth. Another business in the lending sector called Amigo is also profiting sharply and customer numbers in the three months to June 30th were up 39%. Glen Crawford said: "The continuing strong growth in our customer numbers, loan book, and revenues reflect the increasing market penetration of our product and positions Amigo well for the future.
Some people take to Twitter with Joy;
I see Wonga is struggling...couldn’t happen to a more deserving company. Perhaps we could help. How about we all lend the company a tenner each...at interest of say, 3000% if they don’t repay it by teatime on Friday?— ReasonNotTreason (@NickKehoe01) August 27, 2018
@Iromg Just seen on news that Wonga are going into administration. What they need is a pay day loan!!— Northern Monkey (@FootballEars) August 26, 2018
They have preyed on the most vulnerable people with extortionate interest rates, I'm over the moon their going bust.