FI Analysis 38: Loans and payment problems among women and men

2023-04-14 | Reports

Among borrowers over the age of 45, it is more common for women than men to have a debt registered with the Enforcement Authority. One explanation could be that major life events, like a divorce, have more of an adverse impact on women. This is the conclusion of an analysis by the Enforcement Authority and Finansinspektionen

Men, regardless of their age, take out larger consumption credit amounts than women and are more likely to receive a collection notice. However, women over the age of 45 experience serious payment problems – payment orders and debt registered with the Enforcement Authority – more often than men in the same age group.

This is evident in a new analysis of payment problems among borrowers. One likely explanation is that women over the age of 45 are more vulnerable financially during major life events. This is probably due to women having lower income, which then has a greater impact on them during, for example, a divorce or a period of unemployment.

This report analyses people borrowing for consumption as well as how many experience different types of payment problems. While women receive payment orders and have debt registered with the Enforcement Authority more often than men among those over the age of 45, the opposite is true for those under 45, where there is a greater share of men experiencing serious payment problems. This is probably related to men being more willing to take financial risk and that their loans often have a greater adverse impact on their income.

The analysis also shows that the way women and men borrow money differs. Women borrow more frequently, but their loans in general are smaller, while men take fewer but larger loans. This is related to women more often using invoices and instalment payments from sales-financing companies, while men more often borrow from niche banks.

In addition to the differences between men and women, there are also differences between the borrowers' age groups. Younger age groups borrow more often from sales-financing companies, and older age groups borrow more often from niche banks. The share of young borrowers that experience payment problems is larger than the share of older borrowers. This applies to all types of payment problems. The difference between the varying degrees of payment problems decreases with the age of the borrower. Collection notices are a clear indication of future serious payment problems among older age groups, but not among younger age groups.

This analysis is the third in a series where Finansinspektionen and the Enforcement Authority study lending and payment problems together with the Swedish Consumer Agency.

All three are available below.