What has traditionally only been an option forthose residing at the lower end of the wage scale, the number of loans taken out in Finland in recent times suggests that times have indeed changed. People from all walks of life are in debt.

A recent article in Helsingin Sanomat shone a light on the situation. Over the last year, a third of Finns have spent more than they can afford, while one in ten have asked for a salary advance.

According to a survey conducted by TNS Gallup, the vast majority of Finns consider payday loans to be the chief reason for excessive debts. However, a glance at the figures and it seems that only 1-2 per cent of cases of a poor credit record are actually caused by short-term loans. But why is this?

“Clients who are over their heads in debt are not good business for short-term loan companies,” the article quotes Mika Pihlava from Lainasto, the short-term loan company that commissioned the survey. “The largest client group is ordinary Finns who work.”

In fact, after short-term loans became a noticeable problem last year, the government went ahead and implemented reforms to curb their financially destructive influence. As a result of setting a limit to the interest rate that can be charged for such loans, the number of short-term loan companies and loans granted by them slumped dramatically in subsequent months.

Nonetheless, the debt problem remains. Given the amount of businesses that are haemorrhaging employees at present, it may be a while before the amount of people who are currently in debt here manage to find a way to haul themselves up out of the economic mud.

James O’Sullivan