The financial services sector often conjures images of expensively suited handshakes in steel-and-glass skyscrapers. But the provision of credit happens everywhere, from the boardroom to the doorstep. Like retail, it is a broad field.
In the past decade, the ways lending and borrowing both look and occur have changed markedly, particularly when it comes to high-cost consumer finance. As the largest high-street lenders have withdrawn from many product lines, and digitisation has slowly extended its reach, we have seen the rise (and fall) of payday loans companies, and the steady march (and stutters) of listed credit providers Provident Financial (PFG), Non-Standard Finance (NSF) and Morses Club (MCL) – who variously operate under the banners of ‘sub-prime’, ‘near-prime’ or ‘non-standard’ lending.
Last year, the clique expanded with the initial public offering of Amigo Holdings (AMGO), parent company of guarantor lender Amigo Loans. The early market reaction was sanguine. But shares in the group – which lends to individuals with a creditworthy friend or relative prepared to act as a backstop – cratered at the end of August fter a miserable trading update appeared to anticipate a Financial Conduct Authority crackdown.