Consumer Credit in Argentina

PROSPECTS

Consumers increasingly opting for personal loans

Due to the high interest rates in the country, it is becoming more expensive to finance credit cards for Argentinian consumers, making it more convenient to request a personal loan to pay the total amount owed on the credit card instead of trying to finance the payments. The interest rate to finance a credit card in the current economic environment can be more than 100% of the original amount per year.

Auto lending hit by falling new car sales and high interest rates

The contraction of consumption is affecting many industries in Argentina, including the motor trade. Car sales were down in 2018 on the previous year and have continued to show sharp year-on-year declines to date in 2019.

Fintech companies performing well in personal loans

In recent years there has been a significant digital transformation in the financial industry due to the emergence of fintech companies, which have contributed to a new way of thinking, competing and operating in the financial world. These players compete directly with traditional companies within the industry, such as banks.

COMPETITIVE LANDSCAPE

Government relaunches Anses loans to help the most vulnerable groups

In order to stimulate domestic consumption, which had shown a strong decline in the last year, the government has relaunched its Anses loans. The relaunch of this line of loans through the National Social Security Administration (Anses) is part of a package of measures aimed at stimulating consumption and minimising the effects of inflation.

Fintech Agilis offering loans secured against a person’s home

Fintech Agilis has launched a new programme that offers to grant personal loans to consumers in exchange for their property as a guarantee for payment. To begin with, this will be their home that will be put up as surety on the loan, but Agilis has plans to extend the programme to loans secured against other types of property, for example a consumer’s car.

Mercado Libre offering loans on its Mercado Crédito fintech platform

Mercado Libre, which originated in Argentina and is now one of the most highly valued Latin American unicorn companies, has launched Mercado Crédito. This platform offers working capital loans to small and medium-sized enterprises that use its Mercado Libre marketplace or its Mercado Pago payment platform.

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