Friday 18 January 2019

Sub-prime lender Amigo - which charges typical interest rate of 49.9pc - in talks to launch here

A £5,000 loan with Amigo over 36 months at 49.9pc APR will see a borrower pay back a total of just under £8,800

UK-based Amigo had a £607m (€695m) net loan book at the end of 2017
UK-based Amigo had a £607m (€695m) net loan book at the end of 2017
John Mulligan

John Mulligan

UK-based sub-prime loan provider Amigo expects to launch in Ireland this year after it has secured regulatory clearance from the Central Bank, the Irish Independent has learned.

The Irish Independent revealed last year that Amigo was eyeing the Irish market, but at that stage the lender said it had no firm plans to provider services here.

But Amigo - which has 167,000 live accounts in the UK - has confirmed that it is now involved in talks over the move.

"We are in discussions with the Irish Central Bank on regulatory requirements and have started to develop resources in Ireland ahead of an anticipated launch later in the year," an Amigo spokeswoman said.

She added that "many thousands of Irish residents… would benefit from a responsible lending product like Amigo's".

The company has told bond investors that it has applied for a lending licence in Ireland "to test [its] guarantor model in a controlled way with minimum investment required".

The sub-prime lender offers loans of up to £10,000 (€11,334) in the UK with a typical interest rate of 49.9pc. It targets borrowers with poor credit ratings. They require a guarantor to secure the debt.

"Your loan can be for any responsible purpose, ranging from a car to home improvements, and anything in between," it tells potential borrowers.

A £5,000 loan with Amigo 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 8.5pc APR and the total repayable is €5,657. At AIB, the total amount repayable on the same loan and term would be €5,671.

Amigo, whose CEO is Glen Crawford, 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," Amigo tells prospective clients.

"The most important thing for us is that you have a guarantor, typically a friend or family member who trusts you to make the repayments, but is able to make any you do not," it adds.

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

In the financial year to the end of March 2017, Amigo Loans generated a profit after tax of £54.5m (€61.7m).

Last month, news agency Reuters reported that Amigo Loans has hired JP Morgan and RBC Capital Markets to prepare the company for a £500m (€566m) stock market flotation.

In the nine months to the end of December, Amigo reported adjusted earnings before interest, taxes, depreciation and amortisation of £84.6m (€95.8m), a 42pc rise compared to the previous corresponding period. It had a net loan book of £607m at the end of 2017.

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