A/HRC/43/45 for all. The explosive increase in private debt is what has sustained aggregate demand and economic growth over the past decades, often at the expense of indebted households. Millions of people around the world transfer a significant part of their wealth and well-being to the financial sector, whose links to the real economy continue to erode, compromising shared prosperity and financial stability and security, and reinforcing inequality. 83. Private debt should not be contracted by individuals and households as a way to compensate for the State’s obligations to protect, promote and fulfil human rights. Personal or household financial and other costs associated with the repayment of debt should be at such a level that the attainment and satisfaction of human rights are not threatened or compromised. Contracting and repaying debt or defaulting on repayment should not entail human rights violations. 84. In the present report, the Independent Expert has explained that increasing financial inclusion does not necessarily automatically result in real life improvements, more enjoyment of human rights, more sustainable development or less inequality. It is obvious that a number of States (and international financial institutions) support debtfinanced spending at the expense of the provision of public goods and services. 85. It is not surprising that microfinance, being the global flagship of financial inclusion to alleviate poverty, has been widely promoted by powerful global financial stakeholders which, in turn, are not very enthusiastic about engaging in more structural discussions on progressive taxation, tax fraud, care economy or other forms of enhancing State revenues and regulation to improve social welfare programmes and ensure access to a number of essential services. 86. The Independent Expert has considered the negative implications for human rights of microcredit, health-, education- and housing-related debt, abusive collection practices, including the criminalization of debtors, consumer debt, migration-related debt and debt bondage. Bearing in mind the reasons encouraging people to borrow under these typologies, it can be concluded that private debt can be both a cause and a consequence of human rights violations. This also explains why and how social unrest, inequality and unbearable levels of individual debt are intrinsically intertwined. 87. It is true that private debt is selectively coded by national regulations;99 however, debt contracts exist in a broader legal and economic universe, in which human rights law interacts with (and limits) the rights of creditors. Although generally perceived as not dealing with human rights matters per se, financial consumer protection laws and bankruptcy regulations have important roles to play in this regard. Such laws should allow for the protection of individual facing overindebtedness or abusive lending and collecting practices, with have a potential impact on human rights. Consumer and bankruptcy frameworks should thus be envisaged as a mean to prevent possible abuses, to safeguard the human rights of borrowers and to compensate for the inherent power imbalance between the parties to a lending contract. Such an endeavour should include – and even encourage – the possibility for financial consumers to organize and negotiate collectively to compensate the power imbalance between lenders and borrowers. VI. Recommendations 88. The Independent Expert recommends that States: (a) Reduce wealth and income inequalities and eradicate poverty through progressive taxation and transfers, and provide and progressively extend social protection floors; (b) Regulate and monitor all lending activities, formal and informal, ensuring that contractual terms, in particular interest rates and other non-interest charges, 99 18 See Katharina Pistor, The Code of Capital: How the Law Creates Wealth and Inequality (Princeton University Press, Princeton, 2019).