Today we launch the Nordic Debt Collection Analysis no 1 2021

The report, based on millions of anonymised debt collection cases in Denmark, Finland, Norway and Sweden, shows that individuals on low incomes have been disproportionately affected by unemployment and payment difficulties, while those on higher incomes have seen their finances improve.

Individuals on low incomes have been disproportionately affected by unemployment and payment difficulties, while those on higher incomes have seen their finances improve

The number of debt collection cases fell quickly when the pandemic hit the region, as governments introduced policies to mitigate hardship, creditors increased forbearance measures and consumer spending dropped. Despite Sweden’s different approach to the crisis, its economic position mirrors that of the other Nordic countries - people have chosen to stay home and have reduced spending when infection levels are high.

Across the region, the majority of the workforce have kept their jobs. With reduced opportunities to spend money and a rising housing market, many of them have been able to increase their savings.

However, those in low-income jobs have borne the brunt of the crisis. These households are more likely to have suffered unemployment and are less likely to own their own homes. While the low-balance nature of their debts means it is unlikely there will be a financial crisis, we expect an increase in smaller claims throughout 2021.

Despite Sweden’s different approach to the crisis, its economic position mirrors that of the other Nordic countries.

The long-term impact of high public sector spending also remains to be seen. Intervention has prevented short-term credit losses but may have concealed payment issues and is likely to require a future reallocation of resources.

Other findings:

1. The link between economic growth and credit losses has been broken – bankruptcies have fallen despite poor economic conditions

2. Demand for credit has shifted from consumption to housing, representing a reduction in credit risk
3. Fewer defaults among younger people reflect this group’s ability to reduce spending and adjust their costs

Download the report