BOURNEMOUTH’S sub-prime lender Amigo could be sold after it announced it was starting a strategic review amid a “challenging” environment.

Richmond Group, the company owned by Dorset’s richest man, James Benamor, has said it is willing to sell its 61 per cent in the business.

Amigo said this morning it was launching a strategic review and formal sales process which could lead to the sale of all or part of the company.

The lends money at 49.9 per cent APR (annual percentage rate) to borrowers with poor credit histories, allowing friends or family members to act as guarantors.

But in recent months it has faced increasing pressure from regulators and economic conditions. Its chief executive and chairman both resigned last year, while founder Mr Benamor returned as a non-executive director.

A statement from Amigo this morning said: “Amigo has been informed by Richmond Group Ltd, the company’s controlling shareholder, that it is a willing seller of its 60.66 per cent holding in Amigo and, as a result, the company has today launched a strategic review and formal sale process with a view to maximising value for its shareholders which may result in a sale of the company or a sale of some or all of the company’s business.”

It added: “The strategic review will consider various aspects of the company’s strategy, ownership and operating model, including the potential sale of the company as a whole, the sale of parts of the group, reorganisation of entities within the company’s group, the sale of the UK business, the sale of certain books of business including a potential de-listing of the company’s shares.”

The statement said: “As noted in our 2019 half year accounts Amigo continues to face a challenging operating environment. While Amigo remains confident in the robustness of its approach to lending decisions, we are concerned that there may be increased pressure on our business and a continual evolution in the approach of the Financial Ombudsman Service.

“We continually look to enhance our processes and are monitoring developments with a view to assessing the long-term impact on the company.

“Future lending volumes could be impacted by the strategic review of the business model.”

Amigo warned last September that it expected growth this financial year to be “broadly flat”, despite revenue rising 13.7 per cent year-on-year to £71.5million in the first quarter.

Chief executive Hamish Paton subsequently stood down after only five months at the helm.

The company had 88 per cent of the UK market in guarantor loans as of the end of 2017.

At the end of 2018, it had around 217,000 customers with an average outstanding balance approaching £4,000.

James Benamor, who featured on the Channel 4 series The Secret Millionaire a decade ago, was the wealthiest man in Dorset last year according to the Sunday Times Rich List. His fortune rose by £420m to £800m that year after he made £304m selling shares in Amigo Holdings.