Payday lender Wonga to drop toxic name, publicity puppets after losses
Payday lender Wonga plans to replace its toxic brand with a new name and a product line beyond its core payday lending business, its bosses said yesterday.
The online lending company recorded a loss of £ 37.3million in 2014 due to lower lending and sharply rising costs.
She is under financial pressure as she meets strict new regulations, pays compensation to abused clients and cancels inappropriate loans she should never have made.
“With the interest rate cap and fees coming down, margins have shrunk for individual profits,” CFO Paul Miles told City AM.
“If we started from scratch, we could create a sustainable profitable business. But we have the problem with our legacy and how we manage our cost base. “
One way around this is to expand Wonga’s product base beyond the 3 million potential payday loan customers and the wider 13 million Britons who are limited in cash or credit.
“We have worked hard to mend our position with the short term loan product, and we are bringing out 600,000 loyal customers who love the brand and use the product in the right way,” said UK Chief Tara. Kneafsey.
“But in the larger 13m market, we have to ask ourselves how far the brand is traveling. There are different clients with different needs.
This means the company is looking to rebrand, before launching TV commercials again later this year.
“No puppet will be featured, nor anything that looks like a puppet,” Kneafsey said.
Although the company is currently financially strong with a cash flow of £ 125million, it plans to secure debt financing in the years to come – so far it has been fully funded by equity investors and by retained earnings.