Johannesburg - South Africa's credit regulator said on Thursday it had ordered the local unit of British payday lender Wonga to improve its compliance, after finding the company did not verify the income of its customers.

The crackdown in South Africa is the latest regulatory hit for Wonga, which has come under criticism in its home market for charging an annual interest rate of 5,853 percent.

The National Credit Regulator (NCR) said it ordered Wonga to submit an audit report and remove adverse credit bureau listings from some of its customers' records at its own expense.

It also told the short-term lender to rescind judgements taken against clients from whom it had not obtained proof of income and living expenses.

Wonga's chief executive in South Africa, Kevin Hurwitz, said the company would comment later on Thursday.

Last month Wonga was asked to pay 2.6 million pounds ($4.5 million) in compensation to 45,000 UK customers after sending them bogus letters from non-existent law firms that threatened legal action.

New rules in Britain will cap the interest rates offered by the so-called payday lenders, who say their small loans help tide households over until salaries come in.

First-time Wonga borrowers in South Africa can expect to pay a 27 percent premium on a 48-day loan of 2,500 rand.

Repeat customers can borrow up to 8,000 rand.

South Africa was Wonga's first expansion outside the United Kingdom.

The UK business was launched in 2007 by South African founders Errol Damelin and Jonty Hurwitz.

Damelin recently stood down as a director.

Hurwitz cut his ties in 2011.

South African regulators have said consumers are too steeped in credit, with household debt levels averaging around 75 percent of disposable income. - Reuters