Household Loan Delinquencies Rise Again in July as Refinancing Hits 2.6 Trillion Pesos

The brief relief seen in June did not last. Loan delinquency in Argentina’s private sector rose again in July, with households bearing most of the deterioration as family budgets came under increasing pressure.

Consultancy 1816 estimated total private-sector delinquency at 7.73%, up from 7.63% the previous month. Household arrears climbed to 12.94%, while the rate for companies stood at 3.61%. The consultancy based its calculations on data from the Central Bank’s Debtor Register, which it said generally anticipates the official banking report due in September.

The figures mark a sharp change from October 2024, when household delinquency stood at 2.5%. The increase affected 23 of the country’s 30 largest banks. To limit the impact, lenders turned to a record volume of refinancing. Households have already restructured 2.6 trillion pesos in debt, equivalent to 3.7% of the total balance lent to them.

Those arrangements may ease the figures in coming months, but the consultancy said official classification rules make the improvement slow. Borrowers with serious arrears must make consecutive payments on time for five to eight months before they are technically removed from the delinquent category.

The situation is more severe outside traditional banks. Nonfinancial credit providers, a market led by Mercado Pago and Tarjeta Naranja, reported delinquency of 33.69%. Across the entire credit ecosystem, 28% of Argentina’s borrowers were in irregular status. Half of those borrowers owed less than 626,000 pesos, but that amount remains heavy for households facing depressed incomes. INDEC data cited in the report shows that half of employed people earn less than 800,000 pesos a month.

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With so many people carrying irregular debts, it is clear that this is an important issue for a large share of households.