Controversial money lending service Wonga has ignited a political row by offering business loans at annual interest rates of up to 180pc.

Chuka Umunna, the shadow Business Secretary, told The Daily Telegraph Wonga's move was "a damning indictment" of the British banking system and the failures of the coalition Government to get cash to successful firms. "Look at the rates of interest Wonga is charging. This is not cheap money," he said. "It is such a damning indictment of the failure of Government to get the banking sector working that an outfit like Wonga feels it can step into this market and that there will be a plentiful supply of customers." Stella Creasy, Labour MP for Walthamstow, added that the Government's Project Merlin, which aimed to ease credit facilities by forcing banks to show the "capacity and willingness" to lend £190bn each year, had not delivered on its aims, leaving companies "desperate to stay afloat". "We have seen what exorbitant payday loans have done to family finances," she said. "God knows what they are going to do for business finances."....Read more here---: Coalition and banks under fire as Wonga launches business loans