Local authority turns to crowdfunding

Private investors are invited to lend money to Vágs municipality in Suðuroy.

The municipality has now turned to crowdfunding in its efforts to refinance DKK 29 million of debts.

Søren L. Bruhn, CEO of Suðuroyar Sparikassi bank, who heads the project, says that lending money to Vágs municipality can be viewed as an alternative to depositing into your savings account.

Those who opt to lend money to Vags municipality are offered a 0.45-percent interest rate. The municipality borrows the money from Suðuroyar Sparikassi at a fixed three-year interest rate of 0.6 percent, leaving 0.15 percent as a profit rate for the bank.

The bank manager says this is the first time in Faroese history that a local authority uses crowdfunding to refinance its debts.

Translated by prosa.fo