Unsecured personal loans expected to make up 25% of lending by Christine Seib

Premium finance provider Amber Credit will offer unsecured personal loans through brokers by August.

Managing director Barry Meeks said he expected the loans to make up 25% of Amber's lending in 2003.

Amber lent £70m in 2001, which is expected to rise to £130m this year.

The target for 2003 is between £300m and £400m.

Meeks said the company would discuss the loans facility with its 1,200-strong broker base in the near future and expected a favourable response.

"We all know brokers are under a squeeze on margins and commissions and are looking for other income areas," he said.

"With unsecured lending, if someone comes in to find out how much it would cost to insure the car they're thinking of buying, the broker can offer to fix up the car loan for them as well."

Meeks said the loans also made good business sense for Amber.

"The average premium finance loan in personal lines is small, say £600 to £700, over nine months," he said.

"The unsecured loans will be, say, £4,000 over three years.

"It's a more secure, stable type of business, where there's a lot of volatility in the premium finance sector and a lot of customer turnover."

Amber, owned by Skipton Building Society Group, will also sell the loans through some of Skipton's 14 other subsidiaries, which include estate agents and wholesale mortgage brokers.

Meeks was adamant the new venture would not detract from Amber's premium finance business.

"We're not doing this to soften our commitment to premium finance," he said.

"This will be run from a dedicated arm, which will be a totally distinct unit from our premium finance business."

Skipton brought Meeks in to run Amber in March 2001 with a brief of broadening Amber's business base from premium finance to other financial products.

He previously ran Skipton's biggest subsidiary, Homeloan Management, for ten years.

Meeks said he expected to buy up loan portfolios in the coming year.

"We've already bought one lot from another premium finance provider and we think pressure on margins and capital will prompt a lot of insurers to question whether they want to tie up their capital in loans on their balance sheets," he said.

"We're already in talks with several insurers to buy chunks of their loans."

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