Background & Purpose
The consumer credit market has grown rapidly in recent years, with quick loans contributing significantly to severe overindebtedness, particularly among young people with low incomes.
Proposals & Debate
The government proposed and the parliament debated measures to stop the predatory lending practices of independent consumer credit companies, shifting the exclusive right to issue consumer credits to traditional banks.
The Decision
The Swedish parliament approved the government's proposal, meaning that quick-loan companies are banned and only licensed banks may offer consumer credits.
Does this affect you?
- Young adults with low incomes: They are protected from taking high-risk quick loans that previously contributed to severe personal debt.
- Quick-loan companies: Their entire business model is banned as they lose the legal right to operate as consumer credit institutes.
In Practice
- Independent quick-loan companies are no longer allowed to operate in Sweden.
- Only traditional banks have the legal right to provide consumer credits.
- Borrowers can no longer take high-interest quick loans from non-bank lenders.