A CONTROVERSIAL money lender has seen profits surge to £45m after approving nearly 2.5m loans this year.
Blackpool FC sponsor Wonga the amount of loans they gave out jumped by 296 per cent in 2011, helping revenues rise 225 per cent to £184.7m and net income lift 269 per cent to £45.8m.
Co-founder and chief executive Errol Damelin said the group’s success was based on record level of customer satisfaction and a 10-fold increase in the volume of loans taken out by mobile phone.
Mr Errol said: “We delivered another year of growth in 2011 by continuing to use technology to meet people’s cash flow needs in increasingly tailored ways.
“Enabling people to borrow on their terms, with no hidden catches, has also seen us continue to record super-high customer satisfaction ratings with word-of-mouth still helping to drive our growth.”
But Mike Barry, from Blackpool, Wyre and Fylde Credit Union, says Wonga’s results were “very worrying”.
He said: “As people’s budgets have tightened and as banks have withdrawn to a point where they prefer to lend only to those with excellent credit histories, this demonstrates how more and more people are seeing no choice but to resort to extremely high interest credit just to get through the month. Unless they understand what they are doing, it’s very easy to get caught in a never-ending spiral of payday borrowing.”