The overall purpose of this report is to examine whether Wonga has a promising future and to access, and provide a recommendation as to whether it is worth investing in. This is examined in light of the company’s background, key product and operations, financial statistics, a SWOT analysis, ethics and it’s future targets.
Wonga is a british payday loan company which offers, short term high interest loans to individuals online, and within minutes using an algorithm that analyses thousands of pieces of information in seconds. Since its launch it has also added a service where customers can distribute the cost of items bought online over three monthly installments in return for an upfront payment. Through its operations Wonga’s retained profits are equivalent to approximately 5 pence on every pound it is lending. It lent £1.16 billion in the UK last year; up with the number loans granted standing at 3.8 million in the UK, currently Wonga caters to more than one million people in the UK. Wonga remain committed strengthening their balance sheet. In 2012, they ended with a gross cash of £105 million, which is more than doubled the previous year. However, the cost of sales operating the company relatively increased, nearly £140 million, 86% higher than 2011. Wonga’s massive profit margins and average 5853% APR has been surrounded by much criticism from the church of England which threatens to aid credit unions to compete the firm out of business. Furthermore the company has also been widely criticized in the media for its marketing campaign which was targeted at the teenage crowd. But despite all the controversy this company continues to strive and have set their sights on global expansion. The firm is already present in Canada, South Africa and Poland, and through its acquisitions of Nahar Credit, Credito Pocket, and BillPay the company is looking to expand into India, Spain and Germany. From an overall examination of the company,