New Delhi, Sep 9 (PTI): A controversial British loan provider, Wonga, is on its way to tap into India's expanding middle class in need of short-term finance by acquiring majority stake in a Chennai-based company.

Wonga is known in the UK as a 'pay-day lender' due to its strategy of offering high interest rate loans largely to customers in need of cash in between their monthly pay cheques.

As part of its first move into the developing world, Wonga has acquired a 75 per cent stake in Chennai-based Nahar Credits Private to kick off a new wave of expansion for the consumer finance company as it looks to diversify from its UK base.

The company paid around 3.2 million euros for the stake, according to the Sunday Telegraph.

Nahar Credits is historically focused on commercial loans to small companies, a business which has now been closed. But its existing licence permits lending to individuals, which will allow Wonga to move into the Indian market.