The City roundup video: Wonga to cut 300 jobs
Video: Clare Hutchinson provides a run-down of the day's major news from the City
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Wonga, one of Britain’s best known payday lenders, has been making headlines today after it unveiled a dramatic cost-cutting plan that will see more than 300 jobs axed in an attempt to save £25 million.
Further reforms confirmed by the competition watchdog today will place yet more demands on the sector, including requiring firms to list the total amount payable on loans on a price comparison website overseen by regulators.
Wonga said it will have to become smaller and less profitable in the near-term as a result but expects to survive the upheaval.
Others, however, may not be so lucky. The FCA has said that its cap could wipe out nearly all of the UK’s payday lenders, leaving just a handful standing.
Industry experts have said that could push some providers into riskier areas of credit or see more illegal loans pop up, but many are hoping banks and traditional credit providers will step into the gap instead.
While the full effect of the payday industry overhaul is yet to be seen, it does at least seem certain that there is massive change afoot.
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