So How Do We Actually #killwonga?

There’s a well-known philosophical conundrum: if a tree falls in an empty wood – does it make a noise? Well, I'm sorry to reveal to any navel-gazers out there who have been pondering this question for a while, but I can reveal that the answer is yes. The reason I can be so sure is that the tree falling is almost certainly heard by representatives from www.openwonga.com, a website that’s dedicated for people “to discover more about Wonga, the digital finance company.”

Essentially, www.openwonga.com are much like the sensitive outer strands of a spider’s web which when twanged by some hapless insect create vibrations which summon the spider. In this analogy though, the insects are really off-message mentions of the Wonga brand. You can try it on your own blogs and Twitter accounts. For all I know if you whisper Wonga five times into a mirror they might appear behind you. In my own case they got in touch after my last post to point out that actually,their customers don’t pay anything like the 4,212% representative APRs that they’ve been maligned with. 

Strangely they didn’t respond to my question of whether with £48.5m in profits they could charge substantially lower interest rates and still provide a return for shareholders. Or whether, they might like to enhance their brand with a bit of old-fashioned philanthropy towards the marginalised communities from which they make those profits. It seems that like the tree falling in the empty wood, some things are destined to go without an answer. And answers are most certainly needed - read some of the articles covering this topic if you need convincing.

As pointed out last time, #killwonga is not a vendetta against the company itself – and more of a rallying cry to the burgeoning partnerships between those of us who care about Civil-, Big-, Fair- or simply Our- Society [pick your own least offensive phrase] to look at ways that we could create an innovative and disruptive model that would challenge the Wongas of the world. Our values and our focus on social outcomes above distributable profits means we could be part of something that provided a far lower cost alternative for our communities. They wouldn’t then have to turn to private entities, who are duty-bound to make more and more money. 

This notion feels very much of the zeitgeist. Looking around you can see Bank of Dave, My Home Finance, Grameen Bank – it’s not just a general sense of dissatisfaction following the recession that is causing this. Now more than ever, people are looking at the business model of finance and wondering if it can’t be improved upon. Who knows, perhaps the Civil- Big- Fair- Our-Society thinking really will have an effect on our action. 

So how would the #killwonga project work? My personal preference would be to look at how the micro loans can assist investment and enterprise, rather than (just) trying to alleviate indebtedness. We are ideally placed as housing associations to see when our tenants are in a position to use the money in a way that would benefit them. What’s more we can also plug them into a network of business advice and support. And between us, we probably have some spare cash that would be well suited to a modest return in exchange for a managed risk.  

As I’ve mentioned before, the idea of being central to our communities can just as easily be achieved through the loan to start a business, as it can through building homes. And a fund, at a manageable rate of interest lent on the proviso that those using the funds also accessed business help, could be just the alternative needed for a group of people who have often been disenfranchised because they have poor credit ratings. 

There are people already doing this; #justfinance is the term coined by the Community Development Finance Association in its report earlier this year (you can find it and other really interesting stuff on the Social Finance site). If housing associations are serious about financial inclusion, and if there really is an enlightened self-interest for us that strengthens our business and strengthens our communities it requires that some new conversations to happen - doesn't it?