Responsible financing

When granting a loan, the customer’s creditworthiness is calculated on the basis of the information available. We also carefully assess the value of the required collaterals. We try to consider the financial security of the customer and the possibilities for success.

As a part of responsible lending, we consider the interest rate risks in assessing the customer’s repayment ability, offer interest rate hedging products suitable for the customer and encourage the customer to prepare for unexpected events and future acquisitions with continuous saving solutions. Responsible lending also includes explaining the risks so that the customer understands them, as understanding the risks of the project supports the customer’s decision process. At the same time, we strengthen the customer’s financial literacy in our role as a financial coach.

Our responsible way of operating also includes assisting the customer if their ability to pay back the loan has become compromised. When granting a loan, we emphasize the importance of contacting us in case the customer experiences difficulties in making payments. We are often able to find solutions in cooperation with the customer that help the customer overcome the difficult situation.

In corporate lending, the savings banks target reputable micro and small businesses, self-employed entrepreneurs and forestry and agricultural customers as well as public sector operators that are mainly located within the operating area of each savings bank. We provide financing for companies operating in the operating areas of savings banks, thereby promoting employment in the region and enabling the growth and development of local economy for our part. Savings Banks mainly operate locally, and it is the local expertise of the Savings Banks that gives us good opportunities to assess the sustainability of the operations of companies.

An external provider’s service related to sustainable lending is used in the corporate financing activities of the Savings Banks Group. The service is used for checking, among other things, whether the company has been convicted of crime or whether it has been sanctioned by means of any penalty fees.

The Savings Banks Group observes principles of responsible and sustainable lending, which are applied to lending activities together with the Group’s sustainability strategy and other lending-related policies. The principles of responsible and sustainable lending are part of the Amalgamation’s credit guidelines, credit administration guidelines and the justifications of credit decisions for private customers. In addition to the ESG criteria, sectors that are sensitive to climate change have been identified and are monitored in line with the sustainability principles. The share of the credit portfolio in climate change sensitive sectors is monitored on a monthly basis at the Amalgamation level. 

In terms of financing to reduce emissions, the principles of responsible and sustainable lending identify climate-friendly ESG criteria for the credit object and the reduction of carbon exposure in customer selection through exclusion criteria. The Savings Banks Group’s principles of responsible and sustainable lending specify in the sectoral delineation that we will exercise careful case-by-case judgement when making financing decisions, in particular for energy companies that use significant amounts of fossil fuels and peat in their energy production, and for entities with high environmental impact, such as significant greenhouse gas (GHG) emissions to air, water consumption, biodiversity impacts and waste volumes. The likelihood and consequences of the risk must be assessed when considering financing in such cases. For entities that meet these criteria, the Savings Banks Group requires a statement regarding the sustainability of their business operations.

Our goal is, by means of conducting an assessment, to identify the credit products of the Savings Banks Group or our partners that are suitable for the customer and their project. We also take sustainable development into account in financing, and we want to support our customers in the green transition.

For instance, responsibility for ecological efficiency and the climate can be realised through various means, with energy loans being one of them. An energy loan can be granted for an energy renovation of a residence or holiday home. An energy renovation can include changing the building’s heating system (from oil heating to geothermal heating, for example), replacing windows and external doors with more energy-efficient products, installing solar panels or adding more insulation. An energy renovation leads to savings in heating costs during the cold season and cooling costs in the summer. 

Read more about energy loans 

Read more about the Kassavahti deposit funding solution for businesses