Britain's Wonga: Payday Lender and Proud of It

Silicon Valley venture firms back its short-term loan business model
Photograph by Jeff Rotman/Getty Images

London tabloids have characterized Errol Damelin, founder of online lender Wonga.com, as a high-tech loan shark “laughing all the way to the bank.” Incoming Archbishop of Canterbury Justin Welby says Wonga and firms like it violate the biblical ban on usury. Despite the jabs, Wonga has attracted financial backing from established Silicon Valley venture capital firms such as Accel Partners and Greylock Partners, and the site has plans to expand into the U.S. “We’re in the middle of one of the biggest shake-ups of any industry, which is what happens when digital collides with financial services,” says Damelin. Wonga’s lending is “controlled, and it’s short term. It’s all the things that traditional credit isn’t.”

To continue reading this article you must be a Bloomberg Professional Service Subscriber.