WONGA, the online payday lender, is set to double the maximum amount it lends to small firms in a bid to expand its business lending arm, less than a year after it set up the division.
From next week, Wonga for Business – which lends at an annual rate of 26 per cent – will offer fledgling firms up to £30,000, rather than the present £15,000 limit.
The company’s computer algorithms rely on Wonga’s pool of customer data to assess whether a business or individual is fit for a loan. As Wonga started its business lending arm in May last year, it has gained access to more customer information, allowing its computer programs to more accurately predict who is a safe debtor.
Chief executive Errol Damelin’s renewed push into business lending will be closely watched by regulators. The Office of Fair Trading released a scathing report into practices by short-term lenders last week, which gave the firms 12 weeks to clean up their acts or lose their credit licences.
Wonga claimed that many of the criticisms did not apply to it.