Wonga Finance South Africa has confirmed its business and legal identity is a separate entity from the Wonga operation ran out of the U.K, WDFC UK Ltd. which went into formal administration on the 30th of August of 2018.
In recent years, the U.K.’s short-term credit industry leader has faced compensation claims for legacy loans taken out before 2014, a time when the lender was under different management.
As recently as July 2018, Wonga U.K. raised over 10 million pounds in funds from shareholders to save the business, but eventually was placed under administration. Wonga South Africa, on the other hand, is in an entirely different position.
Run as a separate entity, Wonga South Africa is regulated by the National Credit Regulator in South Africa and maintains a separate loan book. As such, the lender continues to trade; with the website providing an online finance option for an ever-growing number of South Africans that are now making use of their 6-month ‘personal loan’ product on offer that makes debt repayments more manageable.
“Wonga Finance SA is regulated and managed locally and is a completely separate entity to the UK operations. As such, Wonga South Africa continues to lend to, and service our customers as normal.”
- quote from wonga.co.za
Wonga South Africa states that it is “business as usual” with their service remaining “committed to simple, fair financial choices” and “responsible financial management”.
Despite the recent collapse of the industry’s biggest British name, short-term loan companies continue to be widely used. The cost of living in major urban cities continues to rise, while wage increases stagnate – average U.K. income has only grown by 1.5% in 2017 and anti-poverty campaigners continue to highlight the widespread struggle ‘as the cost of living rises faster than wages’.
A quick look at the statistics for the reasons behind short-term loans shows that people are struggling to meet basic monthly needs, with over half of all the short-term loans taken cover basic needs such as car payments and household goods.
This strain on personal finances means that many don’t have a surplus of savings to cover unexpected expenses. Traditional financial institutions are slow to meet the black-hole of an unexpected bill between the end of one’s pay slip and the end of the month. This makes it likely we’ll see the convenience and accessibility of online loan companies continue to fill the gap for the foreseeable future.