The cornerstone of unity

79 GUARANTEE FOUNDATION
Even the Bible says that “the poor will always be with you”, so what was it that mobilised the Evangelical- 
Lutheran Church of Finland at the end of the 1980s to develop new methods to help the poorest of the poor, i.e. 
people with histories of imprisonment, substance abuse, or institutionalisation? At that time there was a strong 
economic boom and everybody seemed to be doing incredibly well. But no, not quite everybody: those already in 
the margins were marginalised further 
– what bank would have wanted or needed an ex-convict for a client? 
For this reason the church proposed the creation of the Guarantee Foundation, which would offer to 
guarantee bank loans to combine several debts to one- it is much easier to manage one loan than several 
different debts and the iterest in a bank loan is cheaper than it is on debt -recovery proceedings. The Church´s 
proposal was warmly received; the Foundation was established by the Finnish Association for menatl Health, the 
A.clinic Foundation and the Criminal Sactions Agency and the rules were agreed in record time. 
But then their fortunes changed. The Church decided that funds for the new foundation and its guarantee 
fund would be provided by the Church Joint Responsibility Collection of 1991 (innovation no. 79), but people did 
not like the idea. Volunteers changed their minds ands refused to collect funds and donors disappeared. Roll up, 
ladies and gentlemen, now’s your chance clear the debts of convicts and criminals! Be sure to give generously 
now! But the depression was starting and there were plenty other people who needed help, so the proceeds 
from the 1991 collection were considerably less than they had been in previous years. 
Nevertheless, the Guarantee Foundation started to function in spring 1992. Trained contact people helped 
the clients by negotiating with the creditors to moderate the debts, and guarantees were offered to restructure 
the loans. Activities were conducted on a very small scale, but they did not go unnoticed. When it became 
evident that the Finnish Debt Restructuring Act of 1993 was causing major problems, especially for guarantors 
and families with small children, the Ministry of Social Affairs and Health inquired whether the Guarantee 
Foundation would be willing to expand its operations to offer guarantees to people from outwith special groups, 
and thus prevent debt problems spreading to affect people other than the debtors themselves. The proposal was 
accepted and the Foundation’s operations expanded immensely. Its guarantees are currently very worthy of 
consideration as an aid to voluntary debt settlement; we estimate that around 30,000 Finns have beaten their 
debt problems with our help, and the sum total of debts settled with our guarantees exceeds one thousand 
million euros. 
The Guarantee Foundation has also provided new methods for Finnish social administration. Social credit 
(innovation no. 32) started as our pilot project, but it is now encoded in the law. We participated in the 
development of a debt settlement project, which permitted approximately 10,000 excessively indebted persons 
to restructure their debts. In 1995 we started a toll-
free Advisory Debt Line, which provides “first-aid” help for 
excessively indebted people and directs them to the right services. We have a good vantage point and have thus 
been able to foresee the future causes of debt problems, such as text message payday loans or excessively 
long or large mortgages.
Finnish debts have doubled since 2002. Especially 25
–34- year-olds’ mortgages are large, around 120,000 

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euros on average. Ways of getting into debt have changed, however, and the biggest problems nowadays are 
caused by payday loans that can be secured with an SMS from a mobile phone, and the number of these being 
accessed has grown massively. In 2016 loans to the value of 94, 6 million euros were granted in this manner: 
around 400 000 separate loans. The size of the average payday loan is 246 euros and the average time to repay 
it is 34 days. The annual interest on these loans is over 1000%. This lead to repayment difficulties of nearly 400 
000 people and default increased. A law was stipulated in the parliament to regulate payday loans with regards 
to their interest rates and maximum commissions. 
Guarantee Foundation has created new methods to Finnish social work. Because of our initiative, the Debt 
Settlement Act was created, by which nearly 10 000 people could manage their lives. Foundation ha also means 
for social micro loans. In 1995 started our free of charge telephone counsel. We developed an app called Penno, 
with which one can follow his or her use of money. We are in the center of the everyday life where we can 
forestall future problems, such as payday loans .
There are probably no organisations like the Guarantee Foundation anywhere else in the world, as we know 
from the number of times that we have been invited abroad to talk about our activities. It has been a pleasure to 
do so, and the results speak for themselves. As our founding constitution states, The Other Side of Justice is 
Moderation. 
Leena Veikkola 
– operations manager,
Guarantee Foundation 1991
–2012