04 February, 2013

By VIVA Team

Wonga has an extremely visible high-profile in the UK

Controversial online money lending giants Wonga have set their sights on Spain as they look to expand the business internationally.

Critics have attacked Wonga’s aggressive lending practices, which constitute short-term loans charged at eye-watering rates. To date, the company has already lent more than two billion pounds in the UK, and the company has expanded into Canada, Poland and South Africa.

Wonga’s targeting of the Spanish market comes on the back of recent figures that have revealed that more than a quarter of Spaniards are now unemployed.

“I’m not really ready to share too many statistics about it right now, but what I can tell you is that we think there is a very large market both in the UK and other territories,” said Wonga’s Chief Operating Officer, Niall Wass.

The company has attracted plenty of criticism since it was founded in 2007, attracting accusations that it targets vulnerable individuals who are in financial difficulty.

Britain has long had a culture of personal lending and borrowing, but Spaniards, on the whole, tend to be a little more reluctant to get into debt in the short-term. However, with millions struggling, Wonga feel that now is a good time to expand into Spain.

Wonga’s interest rate charges are advertised as one per cent a day; a figure that may sound reasonable but one that actually works out as 4,214 per cent APR. Although the company’s personal loans are capped at 400 pounds and must be paid back within 40 days, their advertising tactics have attracted scorn from consumer groups.

Spain’s economic situation is not expected to improve too dramatically in 2013, and with official jobless figures showing that 55 per cent of the country’s young people are unemployed, Wonga could well find that the Spanish market is full of rich pickings.