Wonga looks set to make a return to the UK in 2021-22. We can reveal that Wonga is to restart lending again after emerging from administration.
In 2018 Wonga ceased all trading and went into administration. What was once the UK's biggest short term lender, suddenly found itself running out of cash. Whilst their current lending model was profitable, even with the price cap. Their business became un-viable due to the ever-increasing costs of dealing with historic complaints. These complaints surrounded the issue of them issuing loans whilst not doing mandatory affordability checks.
Wonga received a lot of bad press since it started back in 2006, but no one can argue that it went from nothing to the biggest financial brand in the UK with its smart marketing and funny advertising characters.
How do we know Wonga is returning?
Well, that is very simple, we tried to buy the brand. We have made several attempts to buy the brand from the administrators, and despite several attempts, we got nowhere. We couldn't even get a price out of the administrators. Our calls and messages went unanswered and unreturned. It became apparent that the administrators didn't have much interest in selling what remained of Wonga openly.
For those of you who don't know, we have a history of buying failed brands that have found themselves in similar circumstances. Brands such as "Cheque Centre" for example.
Going back to buying Wonga, late last month we found out why our calls were not being returned. We have been told explicitly that the brand would never come up for sale. Wonga is going to be brought out of administration within the next 12-18 months by a new group made up of those close to the original owners.
It is thought that some of the Intellectual property for the value lies outside of the group that is in administration. It, therefore, makes the part of the company that is in administration almost worthless to outside bidders like us. This is because it can't be used again in lending again without the consent of this third party. Something that this group won't do according to our source.
We don't know the terms, we don't know if those who claim they were mis-sold loans by Wonga will still have a claim, but we suspect they will not. The new Wonga will probably only be commercially viable if they can draw a line under any previous liabilities to these borrowers.
We expect this to come as a surprise to many campaigners who thought they had put an end to Wonga. We were always more sceptical, there is no way a brand like Wonga would stay dead for long. All these people did were force Wonga into a process of cleansing their liabilities through the administration process.
We are somewhat jealous that we are not the ones who are going to bring it back.