Argentina faces record debt wave as easy credit fuels defaults

Argentina is grappling with a historic surge in defaults, as 5.8 million individuals now find themselves more than 90 days behind on their payments. The total overdue debt has reached a staggering $3.4 trillion pesos, with a significant portion being over a year old and primarily owed to non-financial entities.

The ease with which young people can now access online loans, often with annual interest rates surpassing 1,000%, is creating a dangerous debt loop. Many resort to taking out new loans to cover existing ones. This phenomenon is further fueled by the loss of purchasing power following the 2023 devaluation and increases in public service costs.

While financial literacy efforts have been made by banks, companies, and the government, they have not reached a sufficient portion of the population. A 2018 law mandating financial education in schools has also fallen short, with a recent study revealing that 86% of young Argentines aged 16-24 received no financial education in the classroom. Instead, 33% turn to social media and influencers for financial guidance.

Argentina's standing in financial education is notably low, ranking 37th out of 39 countries in a 2017 CAF study. Only 9% of participants could solve basic interest calculations. Experts argue that financial education is no longer optional and advocate for a public policy that includes teacher training, age-appropriate content development, inter-provincial coordination, and participation in PISA's financial literacy module.