June 22, 2018 / 11:36 AM / a month ago

Norway debt registry to protect people from "luxury trap"

OSLO, June 22 (Reuters) - Two firms have won permission to collect information on the credit card debt and other unsecured loans held by each of Norway’s citizens in order to prevent excessive borrowing, the government said on Friday.

Norsk Gjeldsinformasjon AS and Gjeldsregisteret AS will each be allowed to collect the data in order to give banks a better basis for processing mortgage applications, thus preventing customers from taking on more debt than they can repay.

“The government’s goal is to prevent Norwegian consumers from falling into the luxury trap,” the Ministry of Finance and the Ministry of Children and Equality said in a joint statement.

The non-mortgage banking sector has seen rapid growth in recent years, leaving many borrowers with high debts despite government efforts to limit the growth in debt.

The average Norwegian household now has debt of some 225 percent of disposable income, the third-highest among OECD member countries, leading to fear it may pose a risk to financial stability.

Norsk Gjeldsinformasjon is owned by banking industry association Finance Norway, while Gjeldsregisteret is owned by Oslo-listed Evry.

Top mortgage lenders in Norway include, among others, DNB , Nordea and Danske Bank. Leading providers of unsecured consumer loans include Norwegian Finans Holding, Komplett Bank and Monobank (MONO-ME.OL). (Reporting by Terje Solsvik, editing by Gwladys Fouche)

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