New temporary limits to consumer loan interest rates due to Corona virus pandemic


The Ministry of Justice of Finland has informed on April 3rd, 2020 that it will in the upcoming weeks start preparing a bill proposal to reduce the maximum limit of consumer loan interests from current 20 per cent to 10 per cent because of the Corona virus pandemic. The proposed changes are planned to be in place until the end of 2020.

The interest rates on the Fellow Finance marketplace are set between the investors and borrowers. Fellow Finance estimates that the new 10% limit would cut the current intermediated loan volume by approximately 50% when compared with the loan volume of March 2020 and given that the level of interest rates offered by the investors wouldn’t decrease from the current levels. If the required interest rates by the investors in a risk class with a current interest rate level of 12% would decrease to maximum of 10%, Fellow Finance estimates to be able to intermediate around 80% of the current loan volume. Most of the loan demand in Finland has already been in loans with interest rates below 10% because of the tight competition on the market.

In the proposed changes Finland is following Poland who decided on a temporary limit on consumer loan interest rates on April 1st 2020 as a part of the new Corona virus pandemic legislation. Fellow Finance always adjusts the cap for offers from investors to the borrowers according to the legislation. For instance, in Poland investors require higher interest rates than the new limit which in the short term decreases the intermediated loan volume if the required interest rates by the investors do not fall from the current.

CEO Jouni Hintikka: “Already without the proposed changes in legislation, the turbulent times have tightened the underwriting in banks and in our service, but also channelled us new customers and increased demand for financing. We estimate that if the required interest rates by investor clients show elasticity and would fall below 10%, we have a change to increase our market share as the competition on the market will ease. In general we find it discouraging that new legislation without a clear link to the handling of the pandemic or its direct consequences is proposed appealing to the pandemic without any proper impact assessment on society. Moreover when the changes in legislation affect the supply of financing and thus reducing the consumption and thus the recovery of the Finnish economy.”


Further enquiries:

Jouni Hintikka, CEO, Fellow Finance,, +358 40 585 5009

Certified advisor, Evli Bank Plc, tel. +358 40 579 6210

Fellow Finance Plc started its operations in 2014. The company is an expansive global FinTech group that provides crowdfunding services. A key role in the company’s business services is played by the leading Nordic¹ loan-based crowdfunding and peer-to-peer platform maintained by the company which has already been used by more than 850 000 customers in approximately 70 countries. Fellow Finance Plc is an Authorized Payment Institution supervised by the Finnish Financial Supervisory Authority of Finland and the shares of Fellow Finance Plc are listed on the Nasdaq First North Growth Market Finland marketplace. The company has approximately 2 500 shareholders.

¹Measured by the amount of financing facilitated. Source: Brismo Market Data (data accessed on 3 April 2020).