Need a loan, my friend? - Thoughts on Amigo Holdings $AMGO
So far, Amigo Holdings Plc's ( Amigo or the Company ) “mid-cost” (49% APR) loans were not in the scope of the Financial Conduct Authority’s ( FCA ) High-Cost Consumer Credit Review published in May-18. Additionally, certain characteristics of Amigo's guarantor loans could also allow the Company to circumvent regulations around persistent debt for the credit card sector. It is hard to argue that Amigo’s loans do not harm consumers. In due course the FCA will create specific regulation for this niche market. Regulation regarding persistent debt would provide clarity on the extent to which defaults and missed payments have been masked by Amigo extending / rolling over loans, which account for somewhere between 45% and 75% of loans originated. The impact of regulatory actions could include write-offs, fines, redress and changes to the operating model, which could make the business model nonviable. Amigo Holdings Presentation ( link ) Reach out to discuss. Antonio