Wonga profits leap 35% as demand for loans increases

ess0two

antrobus wrote: »

Wonga says;

The majority of our customers are young, single, employed, digitally-savvy and can pay us back on time.



Perhaps that's what they mean by digitally-savvy?

Dangerous these machines.

kabayiri

antrobus wrote: »

Wonga says;

The majority of our customers are young, single, employed, digitally-savvy and can pay us back on time.



Perhaps that's what they mean by digitally-savvy?

There is a very large house not far from me. The owner is in the Times Rich List but I forget where. He has multiple businesses, including PDL type companies.

He is in no doubt about the profile of the customers he attracts. I am not sure why Wonga would be any different?

A majority could mean 50.1%.

You may be right of course, but I don't see Wonga advertising aimed at young disciplined types.

They seem to bang on about how it's so flexible because they offer 2 "slider" controls. Why would a digitally savvy person need to be reminded of this all the time? Why do old age puppets appeal to young savvy clients? It doesn't add up to me. Advertising is expensive and carefully planned and designed.

I suspect their PR department is in full operation!

antrobus

kabayiri wrote: »

....He is in no doubt about the profile of the customers he attracts. I am not sure why Wonga would be any different?...

In the same way as the customer profile of your typical Coutts &Co customer is very different from that of your Co-Op Bank customer?

kabayiri wrote: »

.....I suspect their PR department is in full operation!

No doubt it is, but it has been known for PR departments to tell something approaching the truth when it suits.:)

For example, it does appear that 55.1% of Wonga customers are single, and 66.1% have no dependants, whilst they do appear to be younger than average. (33.2% are 18-24 compared to 12% nationally.)

http://www.openwonga.com/uk/statistics

wotsthat

Graham_Devon wrote: »

If you are just going to keep being a little petty and throwing in silly one liners such as christmas as if it's a surprise, then theres really little point in answering your questions. It appears you are simply unwilling to accept that people get hit by unexpected costs which they can't afford. Maybe you need to open your mind instead of talking down to people of lesser means?

Very few costs of living are truly unexpected and can't be budgeted for.

The average loan seems to be about £300. I find it difficult to believe that there are 1,000,000 people who have to turn to Wonga simply because it's impossible for them to accumulate a buffer of £300.

The whole advertising campaign seems to be encouraging people to believe that they offer a credible alternative to budgeting. Wonga are just extracting cash from the gullible and feeble minded. If Wonga and the like disappeared poor people would be better rather than worse off.

chewmylegoff

HAMISH_MCTAVISH wrote: »

Indeed.

On average, a million people borrow £300 four times a year and pay back £375 each time.

Actually their cost of sales reveals that they have bad debt charges of £120 million so for every £1 of interest they charge they are writing off nearly 40p of bad debt. Looks like their TV adverts are quite expensive as well.

Hilariously whilst most companies gear themselves to the eyeballs, Wonga have no debt and paid only £31,000 in financing charges during the year. I find that quite funny although I'm not sure why.

Their net profit before tax is only 7% of income (mainly because of the amount of bad debt and other costs of sale (which I reckon are likely to be advertising, credit checking fees and IT). It's not like the directors are fleecing the business and extracting huge amounts (total directors rem only £800k).

kabayiri

antrobus wrote: »

In the same way as the customer profile of your typical Coutts &Co customer is very different from that of your Co-Op Bank customer?



No doubt it is, but it has been known for PR departments to tell something approaching the truth when it suits.:)

For example, it does appear that 55.1% of Wonga customers are single, and 66.1% have no dependants, whilst they do appear to be younger than average. (33.2% are 18-24 compared to 12% nationally.)

http://www.openwonga.com/uk/statistics

It's definitely not a black and white situation. I agree there is truth in some of the statistics. Any statistic can be used I guess.

It's interesting. Intrinsically I don't like PDL type companies and I wanted to dislike the neighbour, but after speaking - I couldn't. He was quite pragmatic and perceptive. These companies feed a demand , and need their client base, just like the client base need them.

I wish people were able to use Credit Unions to build up a local borrowing history, but these have never really established themselves here.

Loughton_Monkey

Graham_Devon wrote: »

For many people on a very tight budget, thinkgs like a MOT failiure, dentists, new tyres for the car, unknown travelling costs etc, money has to be found.

.......

Some months are just difficult and no amount of "to the penny" budgeting or your version of "education" will sort some people out if money is running extremely tight anyway.

You totally miss the point. Whether or not you 'budget' properly, then "running extremely tight" [a euphemism for spending everything you earn each month] is the issue.

With the benefits network as it is - and leaving aside a relatively few "real" disasters, I, and many others, think it is "sensible" to live on a budget less than your income. Doing so serves the dual purpose of providing savings for retirement/future and temporary funding for the 'unexpected'.

On top of that, I cannot see why a credit card (at, say, 19.9%) would not be your first port of call when necessary unless, of course, you can't get one. If you can't get one, then surely you have 'form' anyway. If you could, but don't, then going to Wonga instead is rather perverse....

So it's no wonder that people use the shorthand of "stupid" to the majority of Wonga's clientelle. To be polite, let's say "less than sensible".

Graham_Devon wrote: »

I'd say it's a total lack of understanding of how some have to live that has you suggesting they just need some education. Maybe the tables could be turned? Maybe looking at how others outside of your privileged position live would be a good place to start....otherwise, to be frank, you are just talking down to people.

Is there no end to your sneering?

You seem to think that people with a bit of wealth behind them got that way through 'privilege'. A few do, but that's the exception rather than the rule. Most got there by "doing the right things". Behaviour, conduct, common sense, committing to education, making rational decisions... Many came from poverty about which even you might cringe. The vast majority of people can live on (say) 10% less than their income. Especially the Wonga customers who are generally in work. To disbelieve this is to fly in the face of facts, and indeed an insult to the thousands that do live on such a lower income.

This is why it is a choice people have made. And they are perfectly free to make it. But I happen to think it is "less than sensible", which is why I find it hard to sympathise.

michaels

wotsthat wrote: »

The whole advertising campaign seems to be encouraging people to believe that they offer a credible alternative to budgeting. Wonga are just extracting cash from the gullible and feeble minded. If Wonga and the like disappeared poor people would be better rather than worse off.

I love the way in this country many people seem to think adults should not be allowed to make their own decisions but that some 'cleverer people' should be able to decide what other people do...do you have no conception of where that slippery little slope leads to?

People waste money on things they don't really need every day - clothes, iphones whatever, if they want to waste money on buying things now via a wonga loan rather than waiting till they can afford it then I for one and not going to tell them that they are not 'clever' enough to make that decison.

Loughton_Monkey

michaels wrote: »

I love the way in this country many people seem to think adults should not be allowed to make their own decisions but that some 'cleverer people' should be able to decide what other people do...do you have no conception of where that slippery little slope leads to?

People waste money on things they don't really need every day - clothes, iphones whatever, if they want to waste money on buying things now via a wonga loan rather than waiting till they can afford it then I for one and not going to tell them that they are not 'clever' enough to make that decison.

A very interesting angle. I must admit that my first instincts are that yes, people are free to make such decisions. I deeply believe, however, that 'cleverness' [or similar] does come into it, but whether or not to "tell" them that, or somehow prevent them doing it is debatable.

I do once remember a definition of "bad driving" and it included the phrase "...causing other drivers to change their speed or direction." Rather good I think.

But doesn't that lend itself to some sort of definition of reckless financial behaviour (or whatever)? It might say something along the lines of 'spend as much as you wish, borrow if you wish, waste what you want, as long as it doesn't cost/harm other financially active people....'

(Text removed by MSE Forum Team)

OK, the son of a billionnaire might spend, spend, spend, and even take a Wonga loan because his allowance is taking time to get through to Antigua.... No problems.

But I don't like the idea of throwing HB and the like to people who worked and earned well, but retired on nothing but £7K State Pension....

wotsthat

michaels wrote: »

I love the way in this country many people seem to think adults should not be allowed to make their own decisions but that some 'cleverer people' should be able to decide what other people do...do you have no conception of where that slippery little slope leads to?

People waste money on things they don't really need every day - clothes, iphones whatever, if they want to waste money on buying things now via a wonga loan rather than waiting till they can afford it then I for one and not going to tell them that they are not 'clever' enough to make that decison.

I agree to an extent but PDL companies make their customers poorer not richer. Presumably you'd tell them that keeping warm by burning £5 notes was a bad idea?

There has to be a balance. People have the freedom to waste their money as they see fit but it's in societies interests for us to get richer rather than poorer. That might require some intervention - doesn't have to involve a clever middle class person being assigned to mentor a poor person.

Perhaps a curb on pay day TV advertising. They portray themselves as mainstream - they're not - there are few circumstances when a PDL is a good idea. We don't argue about the Stalinist state introducing curbs on cigarettes. Same thing - one will destroy your health, the other your wealth.