Yet another story has arisen bashing Wonga and its supposed ‘preying on the poor’ but, as usual, the outcry is just empty pandering to populist sentiment.
The leader of the union Unite Len McCluskey says Wonga is an example of ‘vulture capital, picking wallets and purses clean’.
Such quotes always seem to have the gleeful aim of creating the sort of moral panic we have become accustomed to from certain middle-market tabloids, but other media outlets happily join in the carnival of white noise in their attempt to debase what is perceived widely in a Guy Fawkes-masked Britain as an ugly corporate with exploitative tendencies.
In reality, Wonga helps more than it harms. Its default rate on wholly unsecured personal loans is just 7.5 per cent, making the histrionic claims that its practices plunge people into poverty by default look a little silly. It is wholly transparent as a service, with a homepage clearly displaying the cost of its loans over a given period of time that puts the transparency of bank charges in the shade. It follows that noone is forcing people to borrow from them.
The crux of my point, though, is that it seems to be deemed unacceptable for anyone to celebrate a UK business success story if there is a populist agenda to ram home. Rather than write about what we can learn from a modern tech company with exploding revenues, the media choose to confuse people into thinking that an APR of 5,883 per cent is a relevant figure to consider for a company that deals exclusively in short-term loans.
So, what can we learn from a company with a revered algorithm, some of the best brains in tech, and a business model with designs on international expansion? Rather as much as you would expect from such a summary. In 2011, for our sister website GrowthBusiness.co.uk, Nick Britton conducted an interview with Wonga founder Errol Damelin, where the entrepreneur argued that his service was a force for good. In the interview, Damelin hints at taking his service abroad, something that eventually came to fruition in January this year.
Now, love it or loathe it, this business success story is spreading around the world. It remains to be seen whether, in the event of global success, Britons will see it as evolving merely to colonise other regions with its cancerous legacy, or whether they will take the road less travelled and proudly claim it as their own alongside UK business success stories like Virgin or Dyson.
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