AFSA's Chief Executive Tim Beresford recently shared key insights on Australia's credit and personal insolvency landscape during a national webinar hosted by the Australian Finance Industry Association (AFIA). His address highlighted important trends, challenges, and AFSA's approach to safeguarding the credit system.
Tim noted in his address that personal insolvencies have fallen to their lowest levels since the late 1980s, driven by improved creditor engagement following the 2017 Hayne Royal Commission, more proactive debtor behavior during and after the pandemic, and sustained low unemployment. However, global economic uncertainty is expected to cause a modest rise in insolvencies in 2025–26, still well below the decade average.
Tim outlined 4 key shifts reshaping the credit ecosystem:
- The unsecured credit market has contracted sharply, with new products like buy now, pay later growing but contributing to increased risk.
- Insolvency cases mainly involve renters with a smaller asset base, making this group more vulnerable to economic shocks.
- The link between corporate and personal insolvencies has weakened, helped by low unemployment.
- Business-related personal insolvencies, while a smaller portion of total cases, represent the bulk of the system's financial liabilities.
Safeguarding the credit system together
AFSA's regulatory model focuses on simplicity for users, support for vulnerable individuals, and rigorous enforcement against system misuse. Recent court cases and trustee interventions reinforce AFSA's commitment to protecting system integrity.
Tim closed by urging the industry to embrace collective stewardship of the credit system: 'If you see something, say something'. Together, we ensure access to finance, support business and economic growth, and drive productivity.
