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470,000 Norwegian consumer loans sent for debt collection

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At the end of 2018, Norwegians had amassed NOK 21 billion in consumer loans that had gone to debt collection. In total, there are 470,000 loans and the number is increasing.

The figures were presented in Finanstilsynet’s report on “financial outlook” on Tuesday.

About NOK 21 billion in consumer loans went for recovery to the collection companies at year-end, an increase of 18% from the previous year.

The majority of the cases concern borrowers aged between 30–50, and on average they owe NOK 45,000 in each case.

Financial Supervisor Morten Baltzersen expressed concern that the debt collection companies now have almost half a million consumer loans for collection.

‘’Although several cases may apply to the same person, it goes without saying that these figures include a significant number of people, and for those people it is a huge burden.

This is one of the reasons why we are very concerned with consumer loans, as well as the vulnerability it could represent to the banking and financial system’’ said Baltzersen when he presented the report.

He emphasised that Finanstilsynet follows the consumer loan market closely, and that in the past year they had discovered several cases of unfortunate credit practices.

‘’Many, for example, offer higher loans than customers ask for’’ he said.

In the report, Finanstilsynet also expressed general concern that the total debt burden for Norwegians is increasing, including mortgage loans.

‘’The household debt burden, measured by the ratio of debt to disposable income, is higher than ever’’ wrote Finanstilsynet.

The overview of the number of debt collection cases is based on surveys of a selection of debt collection companies which together have a market share of 90% said the audit report.

© NTB Scanpix / #Norway Today

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