Argentina's fintech boom leaves millions trapped in costly debt
Argentina's fintech lending boom has pushed household bad debts to a record high, as gig workers and families struggle under costly loans.
In Buenos Aires, a delivery rider whose motorcycle is impounded faces a stark choice: borrow at triple-digit interest rates or lose his livelihood. Albert Quintero, a 41-year-old courier, earns about 70,000 pesos ($46) a day, but recovering a seized bike can cost 140,000 pesos ($90) in fines and fees—a sum many workers cannot cover without digital loans.
Apps like PedidosYa offer riders loans at a 131% annual rate, while digital wallet Personal Pay charges around 170%. This credit is increasingly vital as households struggle with living costs and job insecurity under President Javier Milei's austerity reforms.
The fintech lending sector has expanded dramatically, from 500,000 loans six to seven years ago to 10 million today, according to Mariano Biocca of the Argentine Fintech Chamber. This growth follows years of hyperinflation and recession that discouraged traditional lending. As inflation slows, banks and platforms are lending more, but government subsidy cuts have squeezed budgets, boosting demand.
However, the strain is showing. Nearly 6 million people—almost a third of all borrowers—are over 90 days behind on repayments. The household bad-loan ratio hit 12.8% in June, the highest since records began in 2010, up from 2.8% when Milei took office. Analysts note that borrowers accustomed to inflation eroding debt now face sharply positive real interest rates, making loans harder to service.
"They get easy money from digital wallets, but they don't see the interest they are paying," said Enrique Tobani at a protest outside the Economy Ministry. Advocacy groups report people going into debt for basic needs.
The government has resisted calls for state-backed relief, framing rising defaults as temporary fallout from expanding a credit market that remains small relative to regional peers. Yet with job concerns overtaking inflation in polls, analysts warn personal indebtedness could become a political liability for Milei ahead of the 2027 election. Banks and fintechs are now seeking regulatory changes, including lower taxes on loans, to ease borrowing costs.