Co-founder and CEO Errol Damelin has credited Wonga's success to its new iPhone app. There has been a 10-fold increase in the volume of loans taken out by mobile phone, he reckons, and the Wonga iPhone app is currently being downloaded by up to a thousand people a day.
‘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,’ he said in a statement today. ‘[We] continue to record super-high customer satisfaction ratings with word of mouth still helping to drive our growth.’
It is not surprising that Damelin is keen to stress that Wonga has made great strides in the customer satisfaction stakes. The short-term loans industry is currently being investigated by the Office of Fair Trading over accusations that some firms have been targeting people who are unable to pay back the high rates of interest (up to 4,000% per annum).
However, with an interactive slider that shows exactly how much borrowers will pay back on any given amount over a select period of time, Damelin’s claim that Wonga enables ‘people to borrow on their terms with no hidden catches’ is hard to disprove. ‘It is not about the desperation of customers - we reject about 60% of applicants,’ he says. Wonga’s average loan stands at about £160, with interest averaging 1% a day.
Since its inception in 2007, Wonga has issued short-term loans to more than one million people, with a high percentage of repeat customers taking the total number of loans handed out to six million. The firm has also recently branched out into business loans, and promises UK businesses a decision on loans ranging from £3,000 and £10,000 within 15 minutes.
So what next for this money-making money lender? Rumour has it that Wonga is considering a US stock market flotation that could value the business at more than £1bn. Now that’s some serious Wonga…