Thursday 26 April 2018

British sub-prime lender Amigo set to expand into the Irish market

John Mulligan

John Mulligan

Sub-prime UK loan provider Amigo is considering an entry into the Irish market, the Irish Independent has learned.

The lender, part of the Richmond financial group, offers loans in the UK with interest rates as high as 49.9pc and targets borrowers with poor credit ratings. They require a guarantor to back the debt.

A spokeswoman confirmed Amigo is looking at expanding into the Irish market.

"Amigo is growing strongly and we've already helped almost 300,000 customers in the UK, offering a responsible and affordable option for those who are unfairly excluded from mainstream lending," she said.

"We're always looking at ways in which we can help even more people, and are considering a number of options including expansion into the Irish market but at the moment it's purely exploratory."

Amigo advertises extensively in the UK for its expensive loan products, where people can borrow up to £10,000. A £5,000 loan over 36 months at 49.9pc APR will see a borrower pay back a total of just under £8,800.

By comparison, a 36-month €5,000 personal loan from Bank of Ireland charges an interest rate of 7.5pc APR and the total repayable is €5,582. At AIB, the total amount repayable on the same loan would be €5,671.

Amigo bills itself as being a cheaper option for sub-prime borrowers than so-called 'payday' loans.

In Ireland, a unit of UK-based Provident Personal Credit, already offers loans up to €600. Repaid over 26 weeks, that loan attracts an interest rate of 187.2pc APR, that results in the total repayable being €780.

Crucially, Amigo requires borrowers to have a guarantor - a requirement typically not necessary at high street lending institutions for borrowers with income and good credit history.

"It doesn't matter if you have bad credit, are self-employed, or even if you're currently unemployed," Amigo tells prospective borrowers on its website.

"The most important thing for us is that you have a friend or family member who trusts you enough to guarantee to make repayments if you don't."

Amigo is part of the Richmond financial group that was founded by James Benamor in 1999 when he was just 21.

Amigo Loans generated a profit after tax of £54.5m (€59.8m) in the 12 months to the end of last March.

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