Collectable debt increases in Norway

Debt collection credit card pay paymentSwiping your credit card is much easier than paying back your debt. Photo:

Collectable debt increases among young Norwegians

Debt, and collectable debt cases, increase most among young Norwegians. Debt collection companies predict a further increase when debt registers enter into force on July 1st, 2019.

Collectable debt among Norwegian households has grown to NOK 93.8 billion (at the end of 2018). About 23 per cent (NOK 21 billion) of this is related to defaulted consumer debt, according to the half-yearly report of the Norwegian Financial Supervision Agency (FSA). «Financial perspective».

Defaults have increased in the same period, in spite of the report showing a downward trend in consumer debt growth.


Head of Analysis, Magnus Solstad. Photo: Kredinor

Norway’s largest debt collection company, Kredinor, received 1.4 million such cases in 2018. It treated around 700,000 reminder cases. The company’s figures show that debt, and debt related collection cases, increase most in the age groups 18-25 and 26-34 years old. One of the reasons for this is that younger Norwegians are more credit-active than before, partly as a result of increased online shopping, According to Kredinor.

“It is thus reason to believe that this increases the number of defaults. It is, further, likely that the tendency will continue even if the growth rate is indeed going to decline,” Head of Analysis at Kredinor, Magnus Solstad, tells

Kredinor emphasises that it does not advise against using credit cards online for that reason. This is because there is a significant security element compared with other types of cards.

Predicts increase in defaults due to the debt register

In order to predict the impact of the upcoming debt registers, Kredinor points to Norway’s eastern neighbour. The Swedes have had a similar solution for many years. This has largely contributed to keeping the number of defaults lows – at least with regards to unsecured credit loans. The debt collection company expects that the registers will also have the same effect in Norway over time, but they will most likely lead to an increase in defaults at first.

“The reason is, that many who wish to refinance old credit loans, will be denied by the banks – due to a to high total debt burden – when it becomes visible. Thus, in the short term, an increase in the collectable debt cases can be expected in the autumn of 2019,” Solstad explains.

Finance Norway, Evry and Experian are the three players who have been granted a license to establish debt registers in Norway, respectively through the companies Norsk Gjeldsinformasjon, Gjeldsregisteret AS and Experian Gjeldsregister.



Regulation depends on debt registers

The «Regulation for sound lending of consumer loans» entered into force, effective May 15th. This sets restrictions on the criteria an individual must meet in order to take up loans. The regulation thus affects the credit rating process of the banks.

The reason for the regulation is to prevent vulnerable households from incurring higher debt burden than they can handle. Kredinor believes that the regulation, as such, will not have a significant impact on the debt collection level – where 93.1 per cent of all debt collection cases are resolved out of court.

– Only in combination with the debt register will the regulation have real incremental importance in the future. Our opinion is, furthermore, that the vast majority of banks have adapted to the regulations – to the possible extent – before the debt registers are implemented.

Solstad highlights that the effect of the regulation is primarily related to the loan seeker’s serviceability, demands for repayment and maturity. The possibility of individual judgment is virtually eliminated through a flexibility ratio of five per cent, as stated in the regulation.

Collectable debt in Norway

  • Nearly 10 million cases were sent to the debt collection companies in 2018
  • This is an increase of 16 per cent compared with 2017
  • Total collectable debt increased by 13 per cent to NOK 93.8 billion in 2018
  • 36 per cent of all cases are reminder cases (3.6 million cases)
  • 64 per cent are pure debt collection cases (6.4 million cases)
  • The number of debt collection cases increased most among men, with an increase of 24.8 per cent in 2018 compared with 2017
  • Men are involved in twice as many debt collection cases as women
  • NOK 21 billion of a total of NOK 93.8 billion is related to non-payment of consumer debt

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