Fellow Finance prepares for loan rate cap
Finnish peer-to-peer lender Fellow Finance has said it will reimburse lost interest to investors after the government extended a rate cap on consumer loans.
The Finnish parliament approved a rate cap of 10 per cent on all loans amid the coronavirus outbreak in April 2020.
It was due to last from May until the end of December.
Read more: Fellow Finance hopes for more institutional backing
The rules have now been extended to loans made between 1 January and the end of September 2021.
“Loans intermediated in 2020 will no longer be affected by the 10 per cent rate cap and the interest repayments will be done according the rates agreed in the loan contracts,” Fellow Finance said.
“During the temporary rate cap regulation, Fellow Finance will reimburse the difference between the required rate of the investor and 10 per cent until the end of May 2021.
“In May 2021 we will evaluate the continuation of the compensation scheme until the end of September 2021.”
Read more: Fellow Finance warns of lower profits
It comes as the consumer and business lender approaches €700m (£631m) of lending.
Its total loanbook hit €695m in December after investors backed €12.5m of loans during the month.
Read more: Fellow Finance breaks lending record in January
