According to GigaOM, short-term lender Wonga might be in the early stages of planning to launch on the stock market.
Following an injection of £73m back in February of this year, they’re now talking to banks about either an IPO or securing more funding.
This could worry the payday loan opponents; Wonga has caused a fair amount of controversy in its short lifetime, as its short-term loans appear to have excrutiatingly high APRs, because of the way they have to report their rates (showing the cost over a year, even though they do not offer loans over this length of time). Together with this, they’re accused, rightly or wrongly, of targeting the most vulnerable borrowers in an as yet unregulated market, resulting in a “perfect storm” of bad debts.
If you can see past the controversial nature of Wonga’s lending, then behind these stories there is an innovative, technology-driven company, operating in a competitive, low-margin market. For a more balanced view of the operation, take a read of Chris Skinner’s recent article on Wonga, which shows how Wonga try to distinguish themselves from other payday loan companies.
Their latest adverts are, however, terrible: