Simon has over six years of professional trading experience across FX, commodities and equities. He has a strong passion for financial markets and is particularly focused on price action trading
Amigo Holdings PLC (LON: AMGO) shares have been stuck trading sideways since early September amid a lack of significant updates from the guarantor lender. However, new competitors have emerged as a threat to the company’s future.
The last major announcement from Amigo was the result of its annual general meeting on September 29, 2021, where its shareholders approved all the resolutions tabled by the lender’s management team.
Amigo Loans executive team is yet to draft a new compensation scheme that can be approved by the UK’s Financial Conduct Authority (FCA) and the High Court as being fair to the affected customers.
The company’s shareholders and customers seem to be getting impatient with the amount of time Amigo has taken to table a revised compensation scheme, but all they can do is wait.
Nevertheless, Amigo needs to act much faster than in the past, given the recent emergence of competitors such as UK Credit, which offers guarantor loans similar to Amigo’s, but with a fixed rate, unlike Amigo’s variable rate.
Amigo’s competitors are taking advantage of its absence from active lending activities despite the rising demand for guarantor loans in the UK due to the negative impact of the coronavirus pandemic lockdowns.
The longer Amigo takes to resume lending activities, the bigger the market share it will lose to its competitors, who are marketing their services as a better alternative to Amigo’s high-priced guarantor loans.
These factors do not bode well for Amigo Loans, which risks falling behind its peers as more potential customers become aware of other guarantor lenders operating in the UK.
Meanwhile, investors continue waiting for Amigo’s next move since the lender has stated that it risks becoming insolvent if it pays all outstanding claims lodged by the affected clients.
*This is not investment advice.
Amigo Loans share price.
Amigo Loans shares have been trading sideways since early September in a 4p amid a lack of updates from the company.
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