LONDON (ShareCast) - (Sharecast News) - Amigo Holdings has halted all new lending activity, the subprime specialist announced on Tuesday.
The firm - which provides guarantor loans to people who struggle to obtain credit from mainstream lenders - said: "In light of the UK government's efforts to combat Covid-19, and given the ongoing uncertainty that the economic implications of Covid-19 could have for our customer base, Amigo has taken the decision to temporarily pause all new lending activity."

The only exception, said Amigo, would be for key workers, though lending would only happen "in exceptional circumstances".

Amigo employees who work in lending will be transferred to other teams dealing with existing customers.

It did not give any indication as to when new lending would resume, other than to confirm it would continue to reassess its approach "on a regular basis".

The firm announced in January it was seeking a buyer, and the board confirmed on Tuesday it was continuing with that process.

Amigo was founded in 2005 by James Benamor, and lends to people with weak credit scores if they have a family or friend prepared to bear the risk of default. He remains a majority shareholder, but earlier this month he quit the board as part of a long-running and increasingly acrimonious dispute over the way the business is run.

Gary Greenwood, analyst at Shore Capital, said: "The group had already been under pressure to temper its lending activity due to a sharp rise in customer complaints and associated regulatory scrutiny.

"The formal sale process and strategic review of the business continues, although finding a buyer who is able to execute a transaction in the current environment may be difficult, regardless of price. For these and other commercial reasons, we have taken the decision to formally terminate coverage of the stock."

As at 0900 GMT, shares in Amigo were largely flat at 13.28p.

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