"Right now, when issuing a loan, the lender may not be aware of how many various financial commitments an individual has already taken on," Pentus-Rosimannus explained. "This has unfortunately resulted in overborrowing. The data exchange platform to be established is a step forward toward the joint exchange of information between lenders to prevent that."

Currently, lenders do receive information regarding payments in arrears, i.e. overdue, prior to making loan decisions, but they may lack aggregate information regarding all of a potential borrower's financial obligations, which can include credit, loans and purchases made with payment plans.

Creditors likewise aren't obligated to exchange this information. Nonetheless, creditors are legally obligated to lend responsibly.

A total of 100 different creditors that issue loans to private individuals currently operate in Estonia. When making loan decisions, a bank or other creditor may not be aware of all of a borrower's existing financial obligations. Bank statements may reflect payments made on existing loans, but people often have several bank accounts, which they may not disclose to lenders.

According to the Ministry of Finance's plan, a central loan register in Estonia could be designed in such a way that it is maintained by the private sector, and all banks and other creditors report data regarding loan obligations to the data exchange platform on a mandatory basis. Then, prior to making a loan decision, a creditor would submit a query to the central register.

The platform, referred to at the ministry as the positive credit register, would help support the work of debt counselors as well, as the latter often begin by mapping out a debtor's circumstances.

"With the help of the register, this stage could be resolved much faster in the future, allowing [them] to focus on eliminating their debt," the ministry said.

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