Report Highlights Policies for Curbing Debt Stress

The CGAP report Regulatory Options to Curb Debt Stress offers a policy framework for preventing and managing debt stress, which occurs when individual households or whole market segments become over-indebted.

The report highlights indicators – such as rapid growth in the number of lenders targeting the household credit segment, the size of their portfolios and average loan sizes, or debt collection activity – that regulators can use to get an early warning when the risk of debt stress is increasing.

“Debt stress can harm borrowers and lenders alike. As we have seen, it can also result in serious social unrest and political interference,” said Katharine McKee, Senior Advisor at CGAP. “We hope that this report will provide policymakers with appropriate options to address the causes of debt stress early on in the credit market development cycle.”

Read the report on the CGAP website.