Troubled Amigo to return to lending with new brand

Troubled sub-prime lender Amigo has set out plans to return to lending after a two-year hiatus marred by claims that it mis-sold loans.

Shares in the business moved higher on Tuesday morning after it announced plans for new loan products under a different brand.

It comes after Amigo suspended guarantor lending in March 2020 in order to work through a backlog of allegedly unaffordable loans.

The company spent around a year fighting for survival in the courts amid a deluge of customer complaints.

However, last month it was granted High Court approval for a rescue plan which included compensation for past customers.

On Tuesday, Amigo said it plans to bring new lending products to the market as a result, subject to approval by the financial watchdog, the Financial Conduct Authority (FCA).

Amigo said it intends to restart lending by February next year and will aim to raise cash over the next year in order to support plans to hand money back to creditors.

It said its new loan products will trade under a new brand, RewardRate.

The company said it “aims to offer more affordable, responsible and flexible finance for underserved consumers who currently have few borrowing options”.

“RewardRate also seeks to provide a pathway out of higher cost finance to cheaper credit by enabling those who make their loan payments on time to reduce their APR by up to 15 percentage points.

“In shaping the proposition, Amigo’s new management team has taken learnings from Amigo’s past to ensure a customer-centric compliant and responsible culture is at the core of the business as well as an improved underwriting process with enhanced affordability checks for customers.”