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Wonga Chairman quits
Battle weary South African entrepreneur and founder of Wonga Errol Damelin, sick of having to defend the company from political attacks and public criticism, has decided to call it a day.
Since setting up online lender Wonga in 2007, the South African entrepreneur has faced a battering from politicians, the public, and even the Church of England. His business model, which allows consumers to borrow up to small amounts for up to 30 days on an annualised percentage interest rate of 5 853 percent, has been branded immoral for preying on the cash-strapped.
He has always defended Wonga’s sky-high interest rates, saying that the company gives people a choice over how much they borrow and for how long, and that its affordability checks are similar to those used by credit card companies. “It’s a controversial sector – and I’m okay with that. A lot of the great entrepreneurial businesses have been built in controversial spaces. Just look at Betfair, PayPal, Google, Skype, Spotify and Facebook,” Damelin says.
But it seems that the accusations of ‘vulture capitalism’ and ‘legal loan sharking’ finally wore him down.
Having handed over the reins as Chief Executive in November (the official line back then was that he wanted to focus on expanding the business beyond its consumer finance roots and pursue his own entrepreneurial interests), 44-year-old Damelin has now announced that he’s quitting his post as Chairman.
Damelin sees himself as a digital distruptor; what London-based Wonga needs now is a financial services heavyweight.
It will be interesting to see what Damelin, who retains a five percent share in the company with an estimated value of R879 million, does next. He’s always talked about creating Britain’s version of Facebook, Amazon, and Apple, so we expect another tech startup – but in a less controversial space.