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Parliament votes to ban advertising small loans

Advertising small loans to consumers will be banned in Switzerland after both chambers of parliament voted to end the practice.

The Senate on Monday followed the House of Representatives and voted in favour of a parliamentary initiative to ban advertising of small loans, which aims to prevent the Swiss, particularly youth, from incurring excessive debts.

Arguing in favour of the initiative, Social Democrat Senator Géraldine Savary said 80 per cent in debt were aged 25 or under, and it was not uncommon for Swiss in their 20s to have debts of SFr30,000 to SFr40,000. She said small loans were too readily available and advertising contributed to their popularity.

A minority on the right argued publicity was not the only reason for indebtedness amongst the Swiss and that banning publicity was contrary to the principles of a free economy.

A parliamentary commission will be established to determine how to implement the ban.

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