Argentina’s Rising Loan Delinquency: A Deepening Financial Concern

Argentina is facing a growing challenge with loan defaults, signaling potential risks to the financial system and broader economic recovery. Data from the Central Bank of Argentina (BCRA) indicates a significant increase in non-performing loans, particularly within the household sector, raising concerns about consumer financial health and the sustainability of credit growth.

Deteriorating Loan Performance in December 2025

The proportion of families struggling to meet their debt obligations continued to rise in December 2025, exceeding 9% according to BCRA data. This represents a substantial increase compared to the previous year, with some credit lines experiencing even more pronounced deterioration. Private sector disappointing debts reached 5.5% in December, the highest level since the beginning of the series in 2010. The household sector is experiencing a faster rate of deterioration than businesses.

Household Loans Lead the Increase in Delinquency

Within the family segment, total arrears reached 9.3% in December 2025, a 0.5 percentage point increase for the month and a 6.7 percentage point jump compared to December 2024. Specific loan types showed varying levels of distress:

• Personal Loans: Delinquency reached 12%, a near fourfold increase from the 3.3% recorded a year earlier.
• Credit Cards: Arrears reached 9.3% of financing, increasing 7.4 percentage points in twelve months.
• Mortgages: Delinquency was 1.2% in December, compared to 1% in the same month of 2024.
• Pledges: Irregularity rose to 5.8%, with an increase of 2.2 points in the year.
• UVA-adjusted pledges: These recorded a greater deterioration, with a default of 7.5% after rising 4.7 points in twelve months.

Factors Contributing to Rising Non-Compliance

A report by Quantum Finance identified a key factor driving the increase in defaults: the relationship between loan payments and expected income. As inflation slows, fixed loan installments represent a larger portion of monthly income, reducing disposable income and future consumption capacity. For variable-rate loans, particularly those adjusted by the Unidad de Valor Adicional (UVA), real interest rates have exceeded real salary increases since July 2024, creating a growing gap that complicates repayment.

Banks Respond with Credit Restrictions

In response to the deteriorating loan portfolio, banks have begun to limit credit card balances and tighten requirements for granting fresh loans, aiming to contain further deterioration. This tightening of credit conditions could potentially impact consumer spending and economic activity.

Corporate Delinquency: A More Moderate Increase

While corporate delinquency is also increasing, the rate of increase is more moderate. The overall ratio reached 2.5% in December, with an increase of 1.8 points over the year. This increase was particularly noticeable in companies linked to commerce and primary production. Specific corporate financing types showed the following:

• Corporate Mortgages: Reached a default of 3.9% in December, down from 4.7% the previous month.
• Business Pledges: Closed the year with 3.6% irregularity, after rising 2.6 points in twelve months.
• Advances in Current Account: Arrears tripled, reaching 2.4%.
• Document Discount: Irregularity quadrupled, ending at 2%.

Looking Ahead: Implications for 2026

The record levels of loan delinquency observed in 2025 raise questions about the evolution of consumption and economic activity in 2026. While nominal income is improving, it may not be sufficient to offset the growing burden of loan installments. The BCRA’s recent shift to an inflation-adjusted Peso trading band, announced in December 2025, aims to address economic stability, but the impact on loan performance remains to be seen. Further details on the BCRA’s policy shift can be found here.