DUBLIN, Ireland–A subprime lender that has recently entered Ireland’s market and which charges APRs as high as 50% is reporting it has added €2.3m and added over 1,000 customers in Ireland in three months as it continues to grow. But the company’s founder said it’s on a path to “slow-motion suicide.”
U.K.-based Amigo Holdings is offering loans of up to €5,000 to people who may have been declined by banks and credit unions, by listing a friend or family member as the guarantor. It first entered the Irish market in February 2019, where it offers loans with an annual interest rate of close to 50%.
The Independent reported Amigo's financial results for the nine months to December 2019 show its subsidiary has increased its gross loan book to €7.1m, up from €4.8m in September. It now has over 2,900 customers, up nearly 1,100 in the same three-month period.
Amigo Holdings saw pre-tax profits hit £53.5m (€61.5m), down from £79m. It has also set aside £26.6m to deal with a surge in affordability complaints, up from £10.4m a few months ago. It had used £7.9m of that money, the Independent reported.
“In the U.K., the subprime lending sector has faced several complaints from customers who believe they were approved for loans which they could never afford to repay,” the Independent stated. “Figures released this month show that in the final three months of last year, 90% of affordability complaints about guarantor loans referred to the U.K.'s Financial Ombudsman Service were upheld, which is a higher proportion than for payday loans.”
‘Slow Motion Suicide’
Just two weeks ago, major shareholder and Amigo founder James Benamor quit the board and accused the company of "committing slow-motion suicide." He claimed Amigo "must immediately cease lending, collect in the book, pay down debt and proceed directly to judicial review [of these decisions by the Financial Ombudsman Service],” the Independent reported
Amigo said Benamor's analysis of the situation was wrong.