Credit served as the primary catalyst for the increase in consumption that Argentina experienced in late 2024 and early 2025. However, beginning in the previous year, that trend experienced a gradual deceleration and ultimately reversed, influenced by fluctuating interest rates and a significant increase in household defaults. Since then, Javier Milei’s government has not experienced any notable enhancement in either credit or consumption. That has contributed to an uneven recovery, now primarily focused on the energy, mining, and agricultural sectors. While June had indicated a slight rebound in peso lending, the July figures released this week revealed a dismal scenario once more.
Peso loans declined by 1% on a month-on-month basis and 1.3% on a year-on-year basis, as per estimates from First Capital Group derived from Central Bank data. “We’re back to a month with negative real results; last month’s increase couldn’t consolidate into a new trend, and the downward path continues this year,” said Guillermo Barbero. Breaking down lending by category, the firm observed a month-on-month decline of 0.3% in commercial loans, alongside a year-on-year decrease of 1%. “After two positive months, the portfolio’s value falls again, closing out a negative 2026 for financing to businesses and industry,” Barbero stated. Personal loans, in contrast, experienced a decline of 0.7% on a month-on-month basis and a decrease of 5.4% when compared year-on-year.
That signifies a consecutive ten-month period during which balances have decreased in real terms. Barbero posited that lenders are focusing on “recovering and refinancing delinquent borrowers over encouraging new business.” Credit card utilisation decreased by 3.7% from the preceding month in real terms and by 9.8% compared to the same period a year prior. The First Capital partner observed that cardholders “find no incentive to take on debt.” Furthermore, lenders “are being very cautious,” having tightened their assessment criteria and become more careful and selective regarding the approval of new credit lines or the increase of existing limits. Secured loans are experiencing a decline, with a month-on-month decrease of 1.7% in real terms and a year-on-year drop of 6.7%.
Calculations by the research firm 1816 indicate that total delinquency in the non-financial private sector experienced a modest decrease, moving from 7.7% in May to 7.6% in June — marking the first decline in 19 months. Household delinquency decreased from 12.8% to 12.7%, yet it continues to hover at historically high levels. The elevated rate of defaults is hindering the recovery of consumer credit, as a significant portion of recent borrowers have been excluded from the financial system due to outstanding debts. The notable exception is mortgage lending, which has increased for the second consecutive month. This time, the genuine increase was 2.3%, and on a year-on-year basis, it surged by 43.7%. “Expectations of falling inflation in the months ahead have influenced demand for new loans,” Barbero said. He warned, however, that the market “still has to solve the problem of accessing new funds to sustain this growth.”