Amigo returns to market with new loan products

The personal loan starts at 49.9% APR while the guarantor product begins at 39.9% APR, with both products offering the borrower the opportunity to reduce the interest rate charged over time to the equivalent 34.9% APR by making payments on time. Customers can also freeze a payment once a year, with no penalties. 

These products will be marketed under the RewardRate brand - with no new lending taking place under the Amigo brand. The name Amigo will continue as part of a regulated lending entity, Amigo Loans Ltd, as well as the listed holding company Amigo Holdings PLC. 

However no pre-March 2020 loan products will be sold again, with the legacy book continuing to run off.

Amigo suspended lending in March 2020 and subsequently agreed with the Financial Conduct Authority (FCA) not to lend again without regulatory approval. Two years later, the regulator outlined its position stating It could return to lending subject to it hitting a list of conditions. 

Firstly that its new business scheme is sanctioned by the high court and the FCA is satisfied with the plan. The firm also has to meet certain conditions set by the FCA, outcomes testing of the company’s new lending system has to have been completed to the satisfaction of the FCA, and that it deals with - to the FCA’s satisfaction - any other issues that may arise. 

Following the sanction of the new business scheme - which occurred on 26 May 2022 - Amigo has met the FCA’s first condition and continues to engage constructively with the FCA to satisfy it on the other steps. 

As part of the new scheme, Amigo has agreed to a £35m cap on new business lending before the proposed capital raise is completed. The £35m of planned new lending is being funded by internal resources. 

Commenting on the news, Amigo Loans’ chief executive Gary Jennison said: "RewardRate has been designed to support financial mobility for the millions of people in our society who have too few borrowing options. 

“It has been created by a new team, in collaboration with external partners, with the objective of incentivising and rewarding on-time payment and thus moving people towards a better credit rating and onto mainstream banking. 

“RewardRate is backed by a company that has undergone profound cultural change under new management and, once we have FCA approval, we believe it will be an important new addition to the mid-cost market.” 

Amigo will restart lending under its new brand RewardRate on 26 February 2023, with the firm completing a successful equity round by 26 May 2023.