A lot of people are unable to borrow from mainstream lenders because of their credit score, but things weren't always this way. For hundreds of years borrowing was based on your reputation. Bank managers were a part of the local community, personal relationships counted.
The Irish Credit Bureau was formed in 1963 and the Central Credit Register rolled out in March 2018 meaning lenders base their decision more and more on your score provided to the lender you are applying to. Over time, relationships will become less important, computers will take over and pretty soon a number on your file will be all that matters. Customers with high numbers are good and customers with low numbers are no longer welcome.
So if you're more likely to be able to pay off a loan quickly (for example because you are starting your own small business) you get a lower score because the bank gets to make less money out of you.
Amigo trust friends, not computer scores
We’d love to say this was our idea, that we've invented something new here, but we didn't. Guarantor loans have been around since Roman times. In Ireland, guarantor mortgages have been around for some time and most university students rely on a guarantor when they rent their first flat.
In the third world the Microfinance movement, started by Nobel Prize winner Mohammed Yunis, relies on loans being guaranteed by groups. Guarantor-based finance is a back-to-basics approach which is helping people all over the world achieve financial inclusion.
This isn't just a business, it's a cause
What we are doing here is important because it makes borrowing possible for millions of ordinary people who are being excluded by banks. Without us our customers would only have extortionate doorstep loans or loan sharks to turn to.
Who are those people?
Amigo customers come in loads of different shapes and sizes. Young people, people who have been out of the country for some time and micro business entrepreneurs are all very poorly rated by credit scores. What brings all of our customers together though is that they are trusted by their friends and family.
We believe everyone falls into one of these 4 boxes:
If you’re in box A:
you can borrow from a bank and you will repay. You don't need Amigo, you're likely to think we're expensive.
If you’re in box B:
you can borrow from a bank, but we don’t think you should be able to. Box B is the reason the credit crunch happened.
If you’re in box C:
the bank’s computer score has got you wrong. All Amigo customers are in box C
If you’re in box D:
you can't borrow from a bank or from us, in fact you shouldn't borrow from anyone right now. You might want to speak to Citizens Advice - your friends are telling you something, they know you best and borrowing is almost definitely not a good idea for you.