In May, delinquency rates among Argentine households increased for the 19th consecutive month, approaching 13% of total household credit. At non-financial institutions such as fintech companies and digital wallets, that figure surpasses 32% — a record high in both instances. The data originates from a report utilising official statistics provided by consulting firm 1816, which determined that household delinquency increased from 12.1% in April to 12.7% in May. In contrast, the default rate on household loans stood at a mere 2.5% by the conclusion of 2024. “The figure increased more than fivefold in just 19 months, something unprecedented since the end of the convertibility regime,” the report stated, referring to the period between 1991 and 2002 when a fixed exchange rate existed between the Argentine peso and the U.S. dollar. The loan categories most impacted from late 2024 to the present are personal loans and credit cards, attributed to the deteriorating credit conditions during the 2025 election period and stagnant wages, which continue to lag behind the levels observed prior to President Javier Milei’s assumption of office.
The official figure for non-financial institutions stands at 32.2%, a notable increase from under 10% recorded a year and a half prior. The report indicated that, although delinquency rates are elevated across all age demographics, the decrease is significantly more marked among the younger population. “Nearly 40% of those under 35 with active loans, whether from financial or non-financial institutions, have at least one delinquent loan,” the brief noted. Delinquency among businesses experienced an increase, though at a more modest level: rising from 3.3% in April to 3.5% in May. This translated to an increase in total delinquency for the private sector — businesses and households — from 7.3% to 7.7%. The 1816 report estimate is derived from data provided by the Central de Deudores, a governmental body tasked with overseeing the Argentine credit system. The official delinquency figure is set to be disclosed on July 24, coinciding with the publication of the Banking Report by the Central Bank.
Central Bank Vice President Vladimir Werning recently indicated that delinquency had “peaked in the second quarter,” which is approaching its conclusion. Consequently, the consulting firm advised “keeping a close eye” on the data for June and July. However, it cautioned that an expansion of credit is necessary for delinquency rates to stabilise. This did not occur in May, and, according to the consulting firm’s most recent data, it is not anticipated to occur in June either. The brief also stated that it is “unlikely” that household credit will become a significant driver of economic activity between now and the 2027 elections, as it was between the second half of 2024 and the first half of 2025. This is because, on one hand, the Argentine economy is exhibiting strong performance solely in sectors characterised by low labour demand, such as agriculture, mining, and energy. Sectors such as commerce, industry, and construction, characterised by their labour-intensive nature, have not yet experienced a recovery.
Another reason noted in the report is that over 27% of individuals who secured loans are now ineligible for credit due to having defaulted. Despite this situation, the BCRA has consistently indicated that it has no intention of providing financial assistance to affected households. In mid-May, Central Bank head Santiago Bausili directly attributed the situation to the banks. “We’re not going to make decisions with other people’s money, and I trust the banks to resolve the situation without our financial help. They’ll be much more creative figuring out what to do with their own money.”