Creator of most high-profile 'payday lender' argues that the website performs a valuable social function

In all likelihood, Errol Damelin tells me, if I were to seek a loan from his short-term credit website, Wonga.com, I should prepare to be turned down.
We have only been talking – or rather Damelin has, at great speed – for 20 minutes before the founder guesses at my creditworthiness. The heavily freckled South African entrepreneur, in dotcom regulation dress-down attire, is bursting to fight back against perceptions of his business as a predator exploiting the desperate and destitute — a "legal loan shark" as its critics have labelled it.

Despite an impressive pledge to wire short-term loans to customer accounts within 15 minutes, day or night, Damelin insists Wonga is highly selective about who it lends to. I would be likely to get a loan from a high street bank than Wonga, he judges. Less than 30% of applicants are. It helps if you have a good track record of taking out unsecured loans and repaying them on time.

An ambitious web startup that began offering loans four years ago, Wonga has become a lightning rod for criticism, Damelin suggests, because it is the most high-profile business in a growing market for so-called "payday lending". An early day motion tabled in parliament last summer accused it of helping customers into "a cycle of debt, making themselves even poorer".

A year ago the coalition government promised to ban excessive interest rates on credit and store cards and it is under pressure to extend a crackdown to payday lenders. Political attention on Wonga in particular has grown because the firm has been building itself into a.........Read more HERE