The Finnish Justice Ministry’s proposal to limit interest rates on loans requested via text message was sent to parliament today.
The Helsinki-based ministry proposes to cap interest rates on loans of less than 2,000 euros ($2,500) at 50 percent plus reference rate, which is currently at 1 percent, according to an e-mailed statement from the ministry today. The government aims to prevent debt growth and an increase in unserviced loans by setting a ceiling for interest rates.
The average annual percentage rate of text-message loans is about 920 percent, the ministry said in an e-mailed statement.
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