How Short Term Lender Wonga Went Worldwide
When you think of short term finance and payday loans in the UK, chances are the very first brand which springs to mind is Wonga. In a market saturated with short term lenders, British payday lending firm Wonga have climbed convincingly to the top of the pile, despite ever-shifting regulation in a controversial and evolving sector.
Today the brand eclipses its competition, with many of its 400 failing to survive in 2016 as fresh price caps on loan and repayment charges came into action. Wonga, however, has evolved and survived, remaining a recognisable household name in the UK. The brand is so big in fact, it held a sponsorship of the Newcastle stadium, St. James Park.
With UK-domination taken care of, the lender has been expanding rapidly overseas, starting its journey by launching in Canada, South Africa and Poland, before going on to purchase and assimilate a number of foreign short term lenders as part of its global growth.
Today we'll be charting Wonga's overseas growth and discovering what the future has in store for one of the UK's latest internationally successful brands...
Spreading Wonga's wings
Wonga's overseas expansion began back in early 2012, when the payday lender spread its wings to set up shop in South Africa, the birthplace of entrepreneur and Wonga founder Errol Damelin. Seeing significant success just a year and a half after opening its doors in Africa's biggest economy, the lender also opened subsidiaries in Canada and Poland in the same year. Today the brand is well-established in all three nations, with a third Polish office opening in Warsaw in April 2016.
Assimilating the competition
But starting from scratch hasn't been the approach of choice in other new locations. Later international expansions have often hinged on the acquisition of other, financial service companies within each new country. To launch Wonga Spain, the lender purchased Spanish credit agency Credito Pocket in 2013, going on to purchase German “pay later” payment firm BillPay (with two million users to its name) and a stake in Indian firm Nahar Credits Private in October of the same year.
Changing the game
Wonga's purchase of BillPay didn't just give the lender access to the payment service's two million customers across Germany, Austria and Switzerland, it also opened up a new area of business to the payday loan expert. Allowing users to “pay later” for online purchases (often in instalments), this related but markedly different lending model is part of a direction change for Wonga which has already made substantial alterations to its business in the UK in line with shifting regulations.
So what's next for Wonga? With a new direction evidenced by a recent 30 minute film which explored the lives of its customers, and a fresh vote of confidence from the FCA, the lender appears to be working to enhance the quality of its offering – a move many hope will be seen both at home and abroad.