Finland will pass legislation to halve the maximum interest companies can charge on payday loans to ten percent, and prevent them from targeting borrowers by text or direct mail.
The measures were announced on Friday as the government unveiled a series of proposals to help businesses and individuals cope with the economic impact of the coronavirus crisis.
“Around 400,000 Finns have a bad credit record,” Justice Minister said Anna-Maja Henriksson at a press conference in Helsinki.
“In this situation, it is likely that the number will increase. That is why it is necessary to further reduce the maximum interest rate that companies can charge on loans. It is important to preserve the possibility of taking out small loans. So we’re cutting the maximum interest rate on payday loans by half. “
In 2019 Finland set a limit 20 percent on interest charges for small loans and following the implementation of the new law announced, the limit will be 10 percent.
Payday lenders will also be prohibited from using direct marketing methods, such as sending SMS messages or letters to potential borrowers.
The measures will be in place until the end of the year.
Henriksson also said the government would propose to relax lawsuits on business lawsuits, with the aim of reducing the number of bankruptcies during the crisis.
She added that corporate AGMs should not be held as usual during the coronavirus emergency, with remote conferencing one option and postponement of meetings another possibility.