A stable, well-functioning financial market for allA stable, well-functioning financial market for allFI Analysis No. 48: Share of consumer credit debt registered with Swedish Enforcement Authority increases during economic downturns
In 2020, almost 130,000 individuals had a debt registered with the Swedish Enforcement Authority that was related to consumer credit. Since the end of 2020, the general price level has increased (inflation) by almost 20 per cent. The Riksbank raised the policy rate during the same period, making it significantly more expensive to borrow money. In 2023, just over 160,000 individuals with consumer credit had new debts registered with the Swedish Enforcement Authority, which represents an increase of 23 per cent since 2020. The new debts, measured in SEK, that were related to consumer credit were 51 per cent higher than they were in 2020.
Other debts registered with the Swedish Enforcement Authority that were not related to consumer credit increased less. This shows that the share of consumer credit debt registered with the Swedish Enforcement Authority increases during periods of increasing costs. The consumer credit debt measured in SEK increased more than the number of borrowers with new debts. This shows that high levels of consumer credit have made a significant contribution to the increase in debt registered with the Swedish Enforcement Authority.
There are two primary explanations for why consumer credit accounts for a larger share of the debt registered with the Swedish Enforcement Authority. First, consumer credit institutions issued more consumer credit in 2023 than they did in 2020. As a result, more borrowers had debts registered with the Swedish Enforcement Authority since a large share of their customers experienced serious payment problems. Second, the share of borrowers that had debts registered with the Swedish Enforcement Authority increased among customers of both the major and the niche banks. These banks often issue large loans. Even though they did not significantly increase their lending, more of their customers had debts registered with the Swedish Enforcement Authority in 2023 compared to in 2020.
The share of customers that had a new debt registered with the Swedish Enforcement Authority was still largest for consumer credit institutions, but the largest volumes in SEK of unpaid consumer credit debt registered with the Swedish Enforcement Authority is from the niche banks. Payment problems associated with consumer credit increased for borrowers of all ages except the youngest women. Payment problems increased the most for middle-aged borrowers.
