By Greg Wright

Published 16th Jan 2023, 09:48 BST

Updated 16th Jan 2023, 15:17 BST

The lender said it has not managed to find a so-called “cornerstone” investor to help it raise £15m for customers, blaming the “economic backdrop”. Cornerstone investors are often larger players that promise in advance to buy into a company’s fundraising, which helps give confidence to other investors.

Amigo has been on the ropes for several years after receiving complaints over how it sold loans to customers. The lender offers cash to people who cannot get money from regular lenders, but only if they can provide a friend or a family member as a guarantor. In an example on its website, Amigo says it would charge an annual interest rate of just under 50 per cent, meaning a customer paying back a £4,000 loan over five years will end up owing nearly £9,500.

Last May, the High Court approved a deal between Amigo and its customers which would see the borrowers get at least some of the money they were owed by the lender. This plan was conditional on Amigo raising money from shareholders, of which at least £15m would go to its customers. Amigo said it has received some interest from inventors, but no cornerstone investor.

High-interest loans company Amigo is struggling to convince investors to help pay off what it owes to customers who were mis-sold loans they could not afford, the business revealed on Monday.

“It is disappointing that we have so far been unable to identify the requisite equity backers for the business,” said chief executive Danny Malone.

“However, we are continuing with our efforts to put together an equity investor consortium as expeditiously as possible.

Amigo struggles to pay debts to borrowers as investors hold off