Consumer Credit in Chile

2020 IMPACT

Debt deferrals and refinancing options offered as support to borrowers

Over the course of 2020, various actions were taken by the government and individual banks in response to the COVID-19 pandemic with the aim of lessening the financial strain being experienced by many households. Among the main factors placing strain on personal finances during the year were lockdown quarantines which made it difficult or impossible for many people to continue with their normal professional and business activities.

Auto lending struggles due to the shift in the economic landscape

2020 saw auto lending record one of the lowest growth rates in consumer credit in outstanding balance terms while registering among the strongest growth rates in gross lending terms. This is an indication that far fewer Chileans are prepared to borrow money to finance a car or motorcycle, while many existing borrowers are struggling to meet their repayment obligations.

10% pension fund withdrawal scheme adds unexpected dynamism

One of the measures taken by the government of Chile in response to the COVID-19 pandemic that had a particularly strong impact on the country’s consumer credit market during 2020 was the approval of a scheme that allows people to withdraw up to 10% of their pension fund savings during the COVID-19 crisis. This has meant that many people were encouraged to take care of their subsisting debts and reduce their financial burdens, with many others having assigned the money that they saved as the deposit required to finance the purchase of real estate via mortgages/housing lending.

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