The Rise of Credit and the Increase in Payment Defaults

The Belgian credit market has been expanding steadily over the past few years. More borrowers are signing credit contracts, and the average amount borrowed per contract has grown markedly.

While this access to financing supports consumption and investment, it also comes with a downside: a significant rise in payment defaults, which now affect nearly 5% of borrowers in Belgium. This situation has triggered a political and regulatory response aimed at tightening the rules around credit granting.

Several structural factors explain this trend. There is a widespread tendency to live on credit, combined with societal pressure to consume at all costs. At the same time, the cost of living has risen sharply over the past decade, while wages have not kept pace. In real terms, many households are seeing their purchasing power eroded, making it harder to repay existing loans or to take on new ones under safe conditions.

On top of this, a high level of taxation has further widened the gap between disposable income and the cost of everyday life. In such a context, many consumers are turning to credit to maintain their standard of living or to finance important projects. The challenge for 2026 and beyond is clear: how can we ensure that credit remains a useful financial tool rather than a source of over‑indebtedness?

A Consumption-Driven Economy: Why Credit Plays a Central Role

Our economic model is largely built on consumption. When companies, industries, and entire sectors report that “growth is stalled”, it is often a reflection of weaker household spending. Order books in certain branches, such as the automotive sector, have suffered in recent years. Foreign trade balances are also under pressure, with imports often exceeding exports. In this system, a slowdown in consumption can quickly threaten jobs, tax revenues, and overall economic stability.

However, there is a paradox. While public authorities and institutions call for stronger growth, households are facing increasing tax burdens and rising living costs. This fiscal and financial pressure makes it more difficult for many families to maintain the same level of consumption as in the past using only their regular income. As a result, credit becomes a frequent and sometimes necessary solution for funding projects, replacing essential equipment, or coping with temporary financial shocks.

This context also raises a fundamental question about responsibility. Is the main problem the existence of credit itself, or rather the broader environment that encourages over‑consumption while eroding disposable income? Credit professionals are sometimes portrayed as taking advantage of vulnerable consumers, yet they are also subject to strict regulations and solvency assessments that already focus on protecting borrowers. The real challenge is to ensure that households are fully informed, aware of the implications of borrowing, and supported in choosing the right type of financing.

New Credit Legislation in Preparation: Objectives and Measures

In response to the increased number of defaults and concerns about over‑indebtedness, the Belgian government is preparing stricter rules for granting consumer and mortgage credit. The stated objective is to provide better protection for borrowers, especially those who may be more vulnerable or exposed to financial shocks. The draft legislative measures focus on the way credit is promoted, the depth of solvency assessments, and the information delivered to consumers before signing a loan.

Among the measures under consideration are a reduction in advertising by credit institutions, more in‑depth research into the borrower’s solvency and employment situation, and an obligation to provide even more transparent and exhaustive information to clients. Mortgage credit, in particular, is in the spotlight, especially in the context of joint offers that combine a home loan with ancillary products such as fire insurance in exchange for a more attractive interest rate.

While these initiatives are presented as a way to protect consumers, many credit professionals question their real effectiveness. On the one hand, solvency analysis is already at the core of responsible lending practices. On the other, the main driver of excessive borrowing is often not credit advertising itself but aggressive marketing around consumption, lifestyle, and short‑term gratification. Simply limiting credit publicity without addressing these broader drivers may have only a marginal impact on over‑indebtedness.

Potential Consequences for Households, Jobs, and the Economy

Beyond the intention to protect consumers, the tightening of credit legislation could have unintended effects on employment and economic activity. By imposing increasingly stringent constraints on the credit industry, the authorities risk discouraging investment, limiting innovation, and ultimately reducing the sector’s capacity to create jobs. According to the Union professionnelle du crédit (UPC), the measures under discussion could endanger up to 1,000 jobs in the credit industry alone.

A more restrictive framework may also complicate access to financing for certain profiles. This is particularly true for small consumer loans, such as a credit of around €5,000.00 to finance a family project or to cope with an unexpected expense. For many households going through a difficult but temporary period, access to a well‑structured and responsible loan can be a valuable safety net, avoiding more serious consequences such as arrears, penalties, or even bankruptcy.

If these households are excluded from regulated credit, they may have to “go get lost” and turn to less transparent, less protected, or more expensive forms of financing. In the long run, this could increase the number of bankruptcies, drive up unemployment, and reduce tax revenues—precisely the opposite of what the new legislation aims to achieve. The key is therefore to design rules that genuinely protect borrowers while maintaining a realistic, balanced approach that preserves access to responsible credit solutions.