Amigo cashes in on Wonga collapse after clampdown on payday lenders

The chief executive of Amigo Loans said the lender has indirectly cashed in on the collapse of controversial payday giant Wonga as regulators direct customers away from high-cost providers. 

The business, which lends up to £10,000 to those with bad credit histories provided payments are guaranteed by friends or family, said pre-tax profits over the first half jumped 66pc after an increase in customer numbers. 

Chief executive Glen Crawford said the results, the company's first since it joined the FTSE 250 earlier this year, were boosted by Wonga's downfall despite the lenders offering very different products because its failure caused the City watchdog to clampdown on the sector.

After Wonga's collapse, the Financial Conduct Authority (FCA) wrote to lenders offering expensive short-term credit to demand that they review their current processes to make sure they were compliant and make the necessary changes, even if that caused them to go bust.  

"Some of the activities that the regulator has undertaken has restricted the options available to the segment of the community that can't get funding from the banks," Mr Crawford said. "Have we indirectly benefited from that movement from the FCA? Yes, I think we have." 

Mr Crawford said it was "frustrating when we get thrown into the same box as the likes of Wonga" as Amigo does not charge as much as payday loan firms. Although it charges interest rates of 49.9pc, he said there are no hidden costs and the group has no plans to slash rates.