Credit was the great engine behind the surge in consumption Argentina saw in late 2024 and early 2025.
But from the start of last year, that trend gradually slowed and then reversed entirely, driven by volatile interest rates and a sharp rise in household defaults.
Since then, Javier Milei’s government hasn’t seen any significant improvement in either credit or consumption. That has fed into an uneven recovery, one now concentrated in the energy, mining and farm sectors.
While June had shown a faint recovery in peso lending, the July figures released this week painted a bleak picture once again.
Peso loans fell 1% month-on-month and 1.3% year-on-year, according to estimates by First Capital Group based on Central Bank data.
“We’re back to a month with negative real results; last month’s increase couldn’t consolidate into a new trend, and the downward path continues this year,” said Guillermo Barbero, a partner at First Capital Group.
Breaking lending down by category, the firm found that commercial loans fell 0.3% month-on-month and 1% year-on-year. “After two positive months, the portfolio’s value falls again, closing out a negative 2026 for financing to businesses and industry,” Barbero said.
Personal loans, meanwhile, fell 0.7% month-on-month and 5.4% year-on-year. That marks ten straight months in which balances have fallen in real terms.
Barbero argued that lenders are prioritizing “recovering and refinancing delinquent borrowers over encouraging new business.”
Credit card use, for its part, dropped 3.7% from the previous month in real terms and 9.8% from the same period a year earlier.
The First Capital partner noted that cardholders “find no incentive to take on debt.”
On top of that, lenders “are being very cautious,” having tightened their assessment criteria and grown more careful and selective about approving new credit lines or raising existing limits.
Something similar is happening with secured loans, which fell 1.7% month-on-month in real terms and 6.7% compared with the same month last year.
According to calculations by the research firm 1816, total delinquency in the non-financial private sector edged down slightly, from 7.7% in May to 7.6% in June — the first decline in 19 months.
Household delinquency, for its part, fell from 12.8% to 12.7%, though it remains at record levels.
That high level of defaults is also putting a brake on the recovery of consumer credit, since a large share of those who took out loans recently have been shut out of the financial system over unpaid debts.
Mortgage lending escapes the slump
The big exception is mortgage lending, which rose for the second month in a row. This time, the real increase was 2.3%, and year-on-year it jumped 43.7%.
“Expectations of falling inflation in the months ahead have influenced demand for new loans,” Barbero said.
He warned, however, that the market “still has to solve the problem of accessing new funds to sustain this growth.”
