Approximately 5.8 million people in Argentina have fallen into credit default, representing 28% of the 20.1 million individuals who accessed financing, according to a report by the private consultancy Equilibra. This surge in arrears is driven by a sharp decline in real disposable income and a rise in positive real interest rates under the current administration.
Non-Financial Lenders See Highest Default Rates
The crisis is most acute among those who rely on non-bank lenders. According to the Equilibra report, the default rate for individuals who took loans exclusively from non-financial entities exceeds 50%, affecting 2.9 million out of 5.3 million borrowers. This trend suggests a systemic push toward riskier, non-formal credit as traditional banking access narrows.
Young adults are particularly vulnerable. The data shows only 4 out of 10 adults aged 18 to 29 have access to formal credit, and nearly 40% of those who do are currently in arrears.
Income Erosion and the “Milei Effect”
Equilibra attributes the deterioration of credit quality to a “strong fall in real registered and disposable income” affecting 14.5 million people during the gestión of President Javier Milei. The report links this decline to the erosion of formal salaried employment in both the public and private sectors, which has been replaced by low-productivity, informal, and self-employed service work.
The financial burden on households has intensified rapidly. Over the last 24 months, debt service payments to financial institutions as a percentage of the formal wage mass rose from 8.7% to nearly 25%. This shift occurred as real interest rates became “significantly positive,” increasing the cost of borrowing while incomes stagnated or fell.
Rapid Expansion of the Default Pool
The number of people in default grew exponentially from 2.4 million just two years ago to the current 5.8 million. Between July 2024 and May 2025, an additional 3.4 million people entered arrears. The breakdown of this recent increase includes:
- Non-financial exclusive debtors: +1.8 million people
- Mixed debtors (financial and non-financial): +1 million people
- Financial system exclusive debtors: +600,000 people
Regional Disparities and Collateral Defaults
The credit crisis is not uniform across Argentina. According to the report, the proportion of people in mora exceeds 30% in the northern provinces, excluding Jujuy. Conversely, the Centro region and Neuquén maintain default rates below the 28% national average.
The lack of income is triggering a domino effect beyond bank loans. Equilibra notes an increase in payment delays for “expensas” (building maintenance fees), prepaid health insurance (medicina prepaga), and club memberships, indicating a generalized liquidity crisis for middle- and lower-income families.
The Risk of Permanent Financial Exclusion
Lorenzo Sigaut Gravina, Director of Equilibra, warns that nearly 6 million people face total exclusion from formal credit if they cannot regularize their status. He argues that current refinancing proposals—which typically involve extending payment terms or adjusting rates—will be insufficient without a “significant improvement in the disposable income of the people.”
Summary of Credit Deterioration
| Metric | Current Figure |
|---|---|
| Total People in Default | 5.8 Million |
| National Default Rate | 28% |
| Non-Financial Default Rate | > 50% |
| Debt Service as % of Wage Mass | ~25% (up from 8.7%) |