The volume of consumer debt has risen to SFr12.5 billion in Switzerland, according to a new study, but this represents a small proportion of the European total.
Although borrowing for lifestyle spending has a negative image among the Swiss, more people than ever are taking out loans, while banks are eager to secure market share.
The study, by consultancy firm Mercer Oliver Wyman, shows that the average debt per capita in Switzerland is 924 euro (SFr1,430), compared to 2,798 euro per head in Germany and 4,122 euro in the United Kingdom.
These figures do not include mortgage debt. The least indebted Europeans are Hungarians and Czechs, at 216 euro and 167 euro per head respectively.
Switzerland's low level of borrowing can be explained by the fact that being in debt is poorly viewed by society.
This traditional antipathy towards debt has held banks back from marketing in this area but the situation is changing.
Consumer lending has increased by 8.5 per cent per year over the past four years, Norman Karrer of Mercer Olivier Wyman explained at a press conference in Zurich on Wednesday. He added that this year's growth is expected to be significant.
The number of providers in the lending market is relatively low in Switzerland. GE Moneybank currently controls 60 to 70 per cent of the market, with Credit Suisse taking 20 per cent and Migros Bank 8 per cent.
But fresh competition is already on the field. Cashgate, a joint venture set up by four cantonal banks and the Valiant group, and Raiffeisen are also vying for a share of the market.
Mercer Oliver Wyman specialises in financial services strategy and risk management consulting. It has 28 offices and 800 staff worldwide, including an office in Zurich.
swissinfo with agencies
The law on consumer credit, which came into force in 2001, stipulates that maximum interest on loans cannot exceed 15 per cent.
The objective of the law was to protect consumers against excessive debt.
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