The JC Profile: Errol Damelin, payday loan king
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Wonga founder Errol Damelin
It’s all gone wong again for Wonga founder Errol Damelin. It’s only two months since the leading payday loan company hit the headlines because the Archbishop of Canterbury, Justin Welby, said he wanted to compete Wonga out of business, sparking a flurry of press asking whether the company’s sky-high interest rates are exploitative.
Now he’s in trouble with the Jews.
Mr Damelin, 43, is due to speak at a Young Jewish Care event next week and not everyone is impressed. This is an unusual reaction to Mr Damelin because so far his life has been pretty impressive.
Errol Damelin was born in South Africa in 1969 to a Jewish family. He attended the University of Cape Town, where he studied business. On graduating in 1992, he made aliyah. Armed with a master’s degree in management from Boston University he became an investment banker for an Israeli boutique bank now owned by Israel Discount, one of the country’s “big three” retail banks.
It was in Israel in 1997 that he founded his first business, Barzelan, a steel-wire producer in Beit Shemesh, just west of Jerusalem.
He moved to the UK in 1999 and founded software company Supply Chain Connect. SCC, which helps businesses connect the different components of their supply chain, became a global leader, servicing over 250 blue-chip companies. It was bought out in 2005 by Chem Connect. Mr Damelin told the JC last year that it was while at SCC that he got a sense of how powerful internet technology could be.
In December 2006, he founded Wonga.com, a payday loan website offering small cash advances to thousands of UK consumers.
He set up the company with fellow South African Jew Jonty Hurwitz, who had been working in the same building on a different start-up. Mr Damelin provided the banking experience, while Mr Hurwitz was the technical brains behind the complex algorithms that drive lending decisions.
Customers using Wonga.com can decide how much they want to borrow and for how long, and the decision whether to lend or not is made in 15 minutes. Reports put the total value of loans it made last year at £1 billion. But interest rates on these loans can be over 5,800 per cent per year, leading many to claim that the service is exploitative of the vulnerable.
Mr Damelin, however, sees what his company does as a public service. He told the JC: “We didn’t want to solve a small problem but something that was a very real issue for people”.
In August, after 15 years of marriage, he announced his divorce from his wife Julie. The couple have three children and lived in Hampstead, north-west London.
Errol Damelin is described by friends and co-workers as variously “really intense”, “very disciplined”, “extremely dedicated” and “totally focused on his business”. In his spare time he is no less intense. He enjoys “an active lifestyle including mountain biking, sea kayaking and skiing” and, in 2011, took part in the Antarctic ice marathon, which raised £70,000 for the charity, Water.
He is also no stranger to the Jewish charity circuit: last year he appeared on a panel at a World Jewish Relief business event.
If Wonga continues to go from strength to strength, it seems likely that this Young Jewish Care event will not be the last we see of him.