Profits soar for payday lender Wonga.com

The short-term loan provider Wonga.com more than trebled its earnings last year, benefiting from a surge in applications by cash-strapped Britons, many of whom have had difficulty obtaining short-term credit from mainstream banks.

The company's net income rose 269 per cent to £45.8m, with revenue growing at the same rate to £185m.

One of Wonga's backers is Dawn Capital, run by tycoon Adrian Beecroft, left,, the man behind the government's controversial report into the reform of employment law. It offers individuals short-term loans of up to £1,000, which are intended as an alternative to credit cards and personal loans. The number of loans provided in 2011 quadrupled to nearly 2.5 million.

The company has faced accusations that by charging an annual percentage rate (APR) of 4,214 per cent, it takes advantage of the financially vulnerable.

But Wonga's founder, Errol Damelin, said the criticism was unjust, as the loans were not meant to be long-term.

"People do run out of cash from time to time," he said.

Reuters