AMIGO Loans bosses are close to saving the business and its 200 Bournemouth jobs after a scheme to limit compensation payouts was backed by a High Court judge.

Amigo said the hearing had been completed and that the judge had stated he would sanction its plans to cap payments in mis-selling cases.

Amigo’s proposals, which could see complainants receive 42 pence in the pound, were promoted by its leadership as a way to prevent the lender going into administration and leaving customers with nothing.

A statement from Amigo said: “The board is pleased that the court has accepted the New Business Scheme is the best option available for redress creditors who are owed compensation because of Amigo’s past lending practices. A further update will be given in due course.”

Chief executive Gary Jennison said: “We are pleased that the court has decided to allow creditors the chance to maximise their redress payments from Amigo.

"While we must secure the FCA’s (Financial Conduct Authority) permission to resume lending and raise fresh capital, the court’s ruling is good news for creditors, customers and employees, and it takes us a step closer to delivering compensation as well as drawing a line under the mistakes of the past.

“A successful New Business Scheme will open the door to a fresh source of responsible, regulated finance for millions of people in this country who don’t have access to mainstream banking. We have developed new products to serve this market in a responsible way and believe we have a valuable role to play.”

Trading of Amigo shares had been suspended pending the High Court hearing, which was originally scheduled to run for two days.

The company’s New Business Scheme, designed to secure the business and get it lending again, was recently approved by 88.8 per cent of creditors taking part in a vote, with 145,532 votes in favour and 18,401 against.

The business was built on lending money at a 49.9 per cent annual percentage rate to people with a poor credit history who could find a friend or relative to act as guarantor.

After conflict with regulators and a flood of complaints, it stopped offering new loans in 2020.

A previous attempt at a “scheme of arrangement” to cap compensation payouts was rejected by the High Court last year after the FCA objected to the plan. But the authority has not raised any objection to the latest proposal.

Amigo is proposing a new business model which could include payment holidays and reduced interest rates for good payers.