The Financial Conduct Authority (FCA) has told guarantor lender, Amigo to explain more carefully the risks that people are taking on when they agree to guarantee a loan for a family member or friend. The FCA was concerned that guarantors were not always made fully aware of their obligations, nor of the likelihood that they would be on the hook for the loan.
The aim of the review was for the FCA to understand better the role of the guarantor. The feedback from the review has not raised concerns with the guarantor loan product itself or made comments about the underlying business model at Amigo. However, the Review identified some areas where our customer journey could be enhanced.
In response to the review outcome Hamish Paton, CEO of Amigo, said “We are grateful for the significant amount of time and effort that the FCA has committed to the Review and we take on board all of the improvements they have identified. These will be good for customers and other stakeholders, and further, reinforce our strategy of doing the right thing for all our borrowers and guarantors.”
Separately Amigo has announced its latest company results which show that its net loan book increased 8.8% to £730.7 million (H1 FY19: £671.7 million) underpinned by strong customer growth of 17.9% to 222,800. Growth in revenue also increased to £145.4 million, an increase of 11.8% (H1 FY19: £130.1 million)
Commenting on the results Hamish Paton, CEO of Amigo, said “The first half of the financial year has demonstrated continued demand for our guarantor loan product with solid growth in customer numbers. We are making encouraging progress as we roll out the operational and strategic initiatives outlined in August. While it will take some time to see the full benefits, we are pleased with the positive start we have made. Our guidance for the full year remains unchanged.”
“Amigo holds a leading position in the guarantor loans market and our product makes a real difference to the lives of our borrowers, many of whom cannot access credit from mainstream providers. We are determined to use that position to be a role model in a growing sector, working alongside our regulators, to be at the forefront of best practice and achieve the best outcome for our customers.”