March 24, 2020 / 7:43 AM / 7 days ago

UPDATE 1-Subprime lender Amigo suspends new lending amid coronavirus turmoil

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LONDON, March 24 (Reuters) - Subprime lender Amigo Holdings said on Tuesday it would temporarily cease all new lending activity, barring emergency loans to key workers in financial distress as Britain steps up its fight against coronavirus.

Amigo, which provides guarantor loans to borrowers who typically struggle to obtain credit from mainstream lenders said it had taken the decision given “ongoing uncertainty” of the economic implications of covid-19 and the possible impact for its customers.

The company said employees freed up from the pause in lending activity would transition into customer service teams, particularly where customers have a need for forbearance, given changes in their financial circumstance.

It said it would reassess its approach to new lending on a regular basis and has ensured that as many employees as possible were working remotely from home, in accordance with UK government advice.

“Amigo is mindful that it has a requirement to maintain as normal a service aspossible to existing customers, while also protecting the health of our employees,” it said.

Meanwhile, Amigo added that its board would continue seeking a buyer for the company. Earlier this month, the lender said it had appointed consultant Glen Crawford to help with the sales process.

The company’s founder and top shareholder James Benamor, who put Amigo up for sale in January, quit its board on March 4 and has accused the firm of committing “slow-motion suicide” with irresponsible lending.

The company responded to say there were inaccuracies in his claims. (Reporting By Sinead Cruise, editing by Huw Jones and Karin Strohecker)

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