Wonga needed in downturn

Money lender Wonga said strong demand for credit during the downturn drove a big jump in profits.

However, the firm, which offers short term loans up to £1,000, denied it was benefitting from the desperation of customers.

Net profit more than trebled to £45.8m in 2011, from £12.4m in 2010, on revenues that rocketed to £185m.

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The company made almost 2.5m loans, almost four times the amount of the previous year.

It has now made six million loans since it launched in 2007.

"It is not about the desperation of customers - we reject about 60% of applicants," Wonga Chief Executive Errol Damelin told the Reuters news agency.

"This is about a service that is important to people, because they do run out of cash from time to time."

In the past the firm has been criticised for or using aggressive and misleading debt collection methods as well as the high interest rates on its loans.

The firm has said the debt collection problems were isolated incidents and its loans are not meant for long periods, only a month.

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