Finland: Delinquent debt close to depression-era peak, but consumer confidence ticks up

YLE NewsEye on the Arctic

The number of cases of delinquent debt has risen close to levels seen after the 1990s depression.

Last month, around 365,000 cases of bad debt were recorded by Finland’s leading credit agency.

That is a few thousand short of the peak in 1997, but that number is expected to be surpassed in the autumn.

Data from Finland’s leading credit rating agency, Suomen Asiakastieto, says that the number of people in payment difficulties is now close to the level seen in the wake of Finland’s 1990s economic depression.

In total, some 365,000 cases of people being behind on their payments were on the firm’s books at the end of June, and the company is adding new cases at the rate of more than a hundred a day. In the last year the number of cases has risen by 9,000.

The peak of poor credit experienced after the 1990s depression came in 1997, when the number of instances on the register was 368,000. At current rates of growth that figure will be surpassed by the autumn.

On average each person on the register has 17 different instances of bad debt on record. In the worst case, one individual had more than a thousand instances of bad debt. In total, individuals owe around $81.5 million.

The increase comes in spite of legislation that curbed the payday lending industry’s excesses by introducing an interest rate cap from 1 January.

Confidence in economy creeps upward

New consumer trust data shows that individuals’ confidence in their personal finances went up in June, though the overall level of consumer economic confidence remains below the long-term average.

Confidence in Finland’s economy remains below the long-term average level, despite being up on a year ago, new figures released by Statistics Finland show.

Consumer confidence for the month of June stayed at the same level as that of May, and was higher than April when trust in the economy slumped, according to the data. Overall the confidence figures this June are slightly higher than one year ago.

The consumer confidence indicator is based on four measures: people’s personal financial expectations, their feelings about the Finnish economy, the unemployment situation and households’ possibilities for saving.

The positive June figures are based on improved expectations for households’ personal finances compared to May. Other confidence measures remained unchanged or fell slightly.

This story is posted on Alaska Dispatch as part of Eye on the Arctic, a collaborative partnership between public and private circumpolar media organizations.