In the News
Is Wonga on the brink of collapse?
27th August 2018
Can't be long left for Wonga. It's hard to imagine any sane investor wanting to provide rescue capital to a business with large, increasing and uncertain contingent liabilities such as a compensation claim. It must be a black hole.
Little more than five years ago, Wonga was anticipating a $1 billion floatation on the US stock market and they gambled on a multi-million pound shirt sponsorship with Newcastle United. Now - on some estimates, the business is worth less than £30 million.
Crucial to their commercial undoing was the decision by the Financial Conduct Authority (FCA) to introduce caps to the interest rate and total interest that could be paid on un-secure, short-term loans.
This article from the Financial Times considers some of the possible effects on the market for high cost credit if Wonga departs the scene:
Geoff Riley
Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.
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