Thursday, September 28th 2023

Amigo Holdings PLC

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Is Amigo Holdings just the wrong price?

Amigo Loans (AMGO.L) aim to give people the chance to borrow even if they don’t have the perfect credit score. So, if you’ve been told “no” in the past, their mission is to make borrowing possible and affordable.

Its an old fashioned idea brought to present day life. Guarantor lending has been around for decades. They “work” with the company choosing to trust a borrower, even if they don’t have the best credit score, with the help of a guarantor. So, in a nutshell, if you can comfortably afford the monthly repayments and you have someone that’s got your back, then Amigo back you too.

Amigo customers come in all different shapes and sizes. Young people, people who have been out of the UK for sometime and small business entrepreneurs – all of which can all be viewed by banks as being risky when it comes to lending. What brings all Amigo customers together though it that they are trusted by their friends and families. Their own research tells us 67% of the UK would turn to family or friends if they were turned down for credit by the banks, and while many won’t have the money to lend, they still want to help. Amigo offer a way to make it happen.

So all good in principle, however The Financial Conduct Authority (FCA) launched an investigation into the firm’s practices in early June. The firm said that the investigation would focus on whether or not its credit checks on borrowers were carried out in line with lending rules, as it has a requirement for guarantors that can mean that friends and relatives are asked to pay off the debt if the original borrower fails to do so as explained above.

Why the recent sell off?

The firm was recently accused by its own founder and major shareholder James Benamor of lending irresponsibly and failing to tackle an increase in the number of consumer complaints from those who feel they should have never been given a loan. The sub-prime lending sector as a whole has faced a blizzard of complaints from customers who believe they were approved for loans which they could never afford to repay. This has led to the demise of some of the biggest names in the sector, such as Wonga.

Amigo was hit with another huge sell-off last month after a surge in complaints pushed it into the red and it warned its financial future is uncertain, but has todays news changed the goal posts?

Today, Gary Jennison will join the Board as a non-executive director. He has over 40 years of experience within the financial services sector, of which approximately 20 years have been at CEO or board level. Most recently, he was Chairman of Orchard Funding Group PLC for two years until December 2019 and was Group deputy CEO of Together Money for two years until December 2015 These appointments followed a career covering a wide spectrum of the credit industry with positions at The Warranty Group, Secure Trust Bank , Barclays Bank, Lex Vehicle Leasing , GE Capital, Hitachi Credit and Lloyds Bowmaker, among others

Below, Amigo explain in further detail about repaying their Loans…
The author was compensated for this article but does not hold shares in the company.