Errol Damelin could be in line for a £100m windfall four years after helping to create Wonga, the short-term loans firm. It is understood that plans are under way to float the business on the US stockmarket with a potential value of £1bn, Damelin is understood to own around 10% of the company.
Recently Wonga have had adverse publicity -
- They have been accused of trapping customers in a spiral of debt, a typical interest rate on loans are between 0.3% and 2% which could result in an APR of over 4,ooo
- In May the OFT ordered Wonga to improve it's debt collection practices, when it emerged that it had sent customers letters accusing them of committing fraud
- Recently announced the launch of short-term loans to businesses as well as individuals which was widely condemned
Wonga operates over the internet using automated risk processing software which can approve an application in 5 minutes and have money in the customer's account within 30 minutes.
The payday loan market has grown from 300,000 borrowers in 2006 to 1.9m in 2010 with Wonga making profits £16.6m in the year to December 2010
A recent Which? report found that a third of customers, using payday loans, experienced greater financial problems as a result.
Looking for a financial adviser near you?
Do you need financial advice? An independent financial adviser can show you how to make the most
of your money. Find your nearest qualified and regulated adviser using this VouchedFor search tool.
Alternatively, Hargreaves Lansdown, one of the UK’s largest firms providing restricted financial advice, is offering a £200 John Lewis voucher* to new clients.