Germany commissions feasibility study on Irish and Dutch systems of debt counselling
Over-indebtedness: Impact of the Irish Peer Review in Germany: Germany commissions feasibility study on Irish and Dutch systems of debt counselling in order to analyse the transferability of components of both systems to the German situation
Most debt counselling in Germany is organised by NGOs. Debt counsellors are in most cases social workers or have a similar professional background which equips them to deal with the personal and social causes of over-indebtedness. This means that counsellors are not professional specialists in financial and credit affairs. Furthermore, financial institutions such as banks or credit unions are not directly involved in the debt counselling process in Germany.
At the peer review in November 2004 in Cork, the host country, Ireland, presented the Money Advice and Budgeting Service ( MABS), a measure in which the counselling process is supervised by a management board on which a broad range of relevant actors is represented: these include local authorities, Community Welfare Services and bodies such as credit unions, public utilities and the Society of Saint Vincent de Paul in Ireland. MABS has a special relationship with the Irish League of Credit Unions, an extensive network covering some 60% of the population. The credit unions enable clients to open savings accounts and obtain affordable credit.
Through the involvement of credit unions the measure presented by the host country is an example of the direct participation of the financial sector in the counselling process. It is also an example of public/private partnership in the field of debt counselling.
Furthermore, during the Irish peer review one of the peer countries, the Netherlands, reported on the Dutch National Platform for integrated debt counselling – Landelijk Platform Integrale Schuldhulpverlening (LPISHV) – in which the municipal banks play a leading role, in particular regarding debt rescheduling.
The German delegates perceived both the Irish and the Dutch ways of involving the financial sector in the debt counselling process as options for a transfer to Germany.
After the peer review the German ministry commissioned a feasibility study to investigate the Irish and Dutch systems in greater detail and to determine the degree of transferability to Germany. The report of this feasibility study will be available in November 2005.
On the basis of its results, a decision will have to be made, if and to what extent the Irish and Dutch experiences can be transferred to the German context. To make this possible, support from the financial sector in Germany will be necessary.
Please view and download documents related to the Irish Peer Review here.
Further information about over-indebtedness and debt counselling in Germany can be obtained from the website of the German Institut für Grundlagen- und Programmforschung.
