James Benamor: Britain’s billionaire subprime lender

James Benamor escaped a troubled childhood and survived the 2008 financial crisis. Now he has carved out a profitable niche in a controversial industry. Jane Lewis reports.

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A "self-confessed former petty criminal became a billionaire" last month, says The Times. The lucky man is James Benamor, whose subprime lender, Amigo Holdings, has listed in London. The float gave the "guarantor lender" a market capitalisation of £1.3bn, leaving Benamor, 41, "sitting on a paper and cash fortune worth about £1.1bn" nearly triple the previous £380m estimate of his wealth.

Floating Amigo "marks a remarkable turnaround" for Benamor, who talked a decade ago on the Channel 4 programme The Secret Millionaire about his troubled youth growing up in Bournemouth. "I was taking a lot of drugs, became a petty criminal really. I was a nightmare."

Now a father of eight, he still lives in the town, but at a more fashionable address as befits a financier whose lucrative business model has attracted backing from luminaries including Neil Woodford, Invesco Perpetual and JP Morgan Asset Management.

Amigo's subprime stranglehold

It's easy to see why they spot a potential goldmine. Amigo is by far the country's biggest guarantor lender, with an estimated 88% stranglehold over a growing market, says the Financial Times. Like other subprime lenders it targets "high-risk" borrowers with poor credit histories. It typically lends up to £10,000 with an annual interest rate of just under 50% provided the borrower can find a creditworthy friend or relative willing to "guarantee" their debt. Amigo charges far less than the sky-high rates demanded by some payday lenders before the recent government clampdown. Indeed, it now finds itself in a regulatory sweet spot, says the Daily Mail. It has been able "to sidestep recent regulations" capping interest payments because the current rules do not affect guarantor loans.

Benamor owes his enviable lifestyle to a mixture of "luck, hard work and old-fashioned cunning", says the Daily Mail. Born Rachid James Benamor, the son of Tunisian immigrants, he attended Poole Grammar school. By the age of 21 he had already set up "his first loan brokerage company from his kitchen table". In the early years Benamor's holding company, Richmond Group, had outfits trading under a variety of names. The best-known, FLM Loans, survived the 2008 financial crisis to re-emerge in 2012 as Amigo. But Benamor earlier had his knuckles rapped by the Office of Fair Trading for "misleading customers by falsely guaranteeing access to credit".

A sector under fire

An occasional boxer who regularly casts himself as a champion of social justice, Benamor has always portrayed Amigo as a responsible and inclusive lender, regularly weighing into the exploitative models of his peers. Some scent hypocrisy. In 2014 the consumer-rights champion Martin Lewis observed that advertisements describing Amigo's loans as affordable made him feel slightly "sick". "Comparing yourself with the market's dirtiest," Lewis said in a Twitter exchange with Benamor, "doesn't make u clean." His "man-of-the-people image" jars with reports of Amigo's occasionally ruthless handling of individual cases, notes the Daily Mail. Benamor might well have emerged as one of Britain's leading financial entrepreneurs, but he seems likely to remain under fire as a key figure in an unpopular industry.As Labour MP Stella Creasy has observed: "If your friends are giving you Amigo loans, you don't need enemies."

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