Argentina household debt delinquency reaches highest level in decades

Ravier calls household debt ‘problem between private parties’

Argentina’s household loan delinquency has deepened sharply since late 2024, reaching levels not seen in more than two decades, according to research by the Argentine Center for Political Economy, or CEPA. The deterioration spans both the traditional banking system and a fast-growing layer of digital lenders, drawing competing diagnoses: economists who point to falling real incomes and the cost of credit as drivers of the surge, and the government of President Javier Milei, whose officials have described the situation as a “problem between private parties” and said taxpayers should not bail out lenders. Analysts critical of the administration have called on the government to intervene; officials have rejected those calls.

The CEPA report, based on data from the Central Bank and its Central Debtors Registry, found that 12.8% of bank loans to households were delinquent in June 2026 — up from 2.5% in October 2024, a more-than-fivefold increase. The researchers said the current rate has not been matched since Argentina’s 2001 economic crisis.

The deterioration is sharper outside the traditional banking system. Among digital wallets and other companies that extend credit outside the regulated bank sector, the delinquency rate reached 30.1% in June 2026, up from 7.3% in November 2024. CEPA said that figure surpasses the 27.1% peak recorded during the COVID-19 pandemic in May 2020. Official data showed 20.96 million people had debts with banks or nonbank credit providers in June 2026, of whom 5.91 million were behind on payments.

Argentina also ranks first in Latin America for bank loan delinquency. A report by the Latin American Federation of Banks, or Felaban, published by the Argentine outlet Infobae, compared 16 Latin American countries and found that 7.3% of loans issued by Argentine banks to the private sector were delinquent in the first quarter of 2026, well above the regional average of 2.78%. Brazil stood at 4.3% and Colombia at 3.7%. The Felaban figures cover only traditional banks and do not include loans issued by digital wallets, fintech firms and other nonbank credit providers.

Inside the household sector, the problem is concentrated in two credit products used by millions of families. Delinquency on personal loans rose from 3.3% in October 2024 to 15.9% in May 2026. For credit cards, the rate climbed from 1.6% to 13.1% over the same period.

Young people are the most exposed group. CEPA’s analysis found that people under 35 account for 38.7% of all delinquent borrowers, meaning nearly four in 10 people behind on payments are in that age bracket. Digital wallets play a particularly large role among younger borrowers: of those delinquent borrowers under 35, 72.6% owe money to those platforms.

Hernán Letcher, CEPA’s director, told UPI that the main factor behind rising household debt is the loss of purchasing power. “Many families had to compensate for that loss by taking on debt,” Letcher said. He pointed to sharp increases in expenses households cannot avoid — utility costs up about 850% and transportation costs up nearly 1,500%, against wage growth of roughly 300%. “For many families, that adjustment meant cutting spending, but also taking on debt. First, they postponed payments and rolled over their debts until they reached a point where they could no longer keep paying them,” he said.

Letcher also cited the high cost of borrowing. Although the government has reduced some benchmark interest rates, he said, the total financial cost a borrower ultimately faces can run from 180% to 1,500% — extraordinarily expensive against annual inflation of 35%. To illustrate the point, Letcher said he simulated a short-term loan offered by a digital wallet and was quoted a rate of nearly 900%. “I have a very good payment record and even then, they offered me that rate. I didn’t take the loan,” he said.

He identified a third factor: the ease with which consumers can obtain new loans. “Apps constantly offer credit and often do not sufficiently assess the income of the person applying,” Letcher said. “That creates a very dangerous combination: people who need money and platforms that make it extremely easy for them to borrow.”

Letcher and other economists critical of the Milei administration have linked the surge in delinquency to the president’s economic program. The government has framed the situation differently. Milei and Economy Minister Luis Caputo have described it as a “problem between private parties.” Presidential spokesman Adrián Ravier reiterated that position this week. “The problem here, to a large extent, lies with the banks and nonbank financial institutions that issued loans at high interest rates, perhaps to protect themselves against the risks they were taking, and this has left these financial institutions exposed,” Ravier said. “Having the government rescue them with taxpayers’ money would, in some way, mean taking resources from one part of the population to save the banks.”

Guido Zack, economics director at the consulting firm Fundar, questioned that framing. “Millions of people made similar decisions. It is not possible to think that they all coordinated to make the same mistake at the same time. What existed were the wrong incentives,” Zack told UPI. He said the government bears responsibility for creating those conditions and now “maintains that it is not their responsibility to do anything.” Zack estimated that about one in four Argentines with a loan is behind on payments and that roughly one in every six pesos lent to households is not being repaid on schedule.

Gala Díaz Langou, director of the International Panel on Social Progress, or IPSP, agreed that declining incomes are driving demand for credit to cover everyday expenses rather than larger purchases. “There is greater demand for credit because real income has fallen. Many people are using credit to cover their everyday consumption,” Díaz Langou said. She also pointed to the expansion of nonbank lending — “digital wallets and cards issued by nonbank financial companies” — and to what she described as the government’s refusal to intervene. Without refinancing programs, she said, the problem is likely to continue growing.