Policy Note : Addressing Financial Consumer Over-Indebtedness

Overview & Synopsis

Financial consumer over-indebtedness has become a growing source of harm to individuals and households, with risks being exacerbated by the rapid expansion of digital lending, income instability, rising interest rates, and cost of living pressures. Financial sector authorities face the difficult task of identifying effective policy responses while avoiding unduly restricting access to credit. This Note aims to help authorities address these challenges by providing a holistic overview of financial consumer protection and personal insolvency policy measures, and other complementary initiatives (including on financial education and data), that can be employed to prevent, mitigate and resolve consumer over-indebtedness.