Shares in Amigo Holdings soared early on Friday after the regulator gave the embattled firm the green light to resume lending.
The guarantor lender, which was derailed by a barrage of customer complaints over alleged mis-selling, restricted lending at the start of the pandemic before suspending all activity in November 2020.
Following a lengthy investigation, the Financial Conduct Authority agreed a rescue plan with Amigo, which included paying compensation to creditors and returning to lending by 26 February 2023.
The high court sanctioned the scheme in May, and on Friday Amigo said the FCA was now satisfied it had met the threshold conditions for Amigo to return to lending.
Shares in Amigo soared as trading got underway, and by 0830 BST, the stock was up 50% at 5.63p.
Amigo said lending would resume via pilot scheme, which would limit the level of new loans for at least two months.
In a letter dated 13 October, the FCA told Amigo: “The lending pilot will enable the firm to test its proposed return to lending policies and procedures in a controlled environment, in which the firm is expected to undertake the agreed robust outcomes testing.”
The regulator acknowledged that a full return to lending was central to the scheme, however, noting: “Following the end of the pilot lending phase, the FCA will consider the impact on consumers of the firm returning to lending on a wider scale.”
Danny Malone, chief executive, said: “We return to lending with FCA approval as a changed company in terms of our values and the way we operate, with a focus on supporting financial inclusion and mobility for customers.
“A successful pilot will also move us a step closer to paying out compensation to redress creditors under the terms of the scheme.”
