“We need to lower the cost of credit,” said Pedro Inchauspe, signaling a major policy shift at Argentina’s central bank.
As family default rates sit at historically high levels and private sector lending stagnates, the monetary authority is advancing three distinct financial instruments. Inchauspe, a director at the central bank, detailed the ongoing strategy during a recent media payment industry event.
Targeting Payroll Deductions Across the Workforce
The central bank is moving forward with direct salary deduction codes to secure loan repayments directly from a debtor’s income. The government operates two separate schemes for this mechanism, dividing workers between the public and private sectors.
For public employees, the central bank collaborated with the Ministry of Deregulation to modify the regulating decree. This implementation phase removes interest rate caps, permits the transfer of loan portfolios to eligible financial entities, and expands funding depth.
For private sector employees, the mechanism was established under the Labor Modernization Act and remains in the design phase. Coelsa will centralize affected cash flows, keeping fund assignments under the employee’s control without imposing administrative duties on employers.
Turning Credit Card Receipts into Negotiable Securities
The second initiative targets commercial liquidity by turning credit card sales into negotiable and transferable coupons. This instrument would hold executive title status with public offering eligibility for open mutual funds.
When consumers use a credit card, the issuing bank approves a line of credit beforehand, leaving the merchant with a payment guarantee backed by the bank. Inchauspe estimated that over 90% of the risk linked to these payment flows equates to a “triple A” credit rating.
This structure aims to let merchants finance operations at rates matching commercial paper risks. The central bank is currently deciding on the final design parameters after studying regional implementations in Brazil.
Central Bank Targets Open Finance Rollout by 2027
The third policy pillar focuses on open finance, allowing users to share financial data securely across different institutions. The central bank targets initial testing before the end of the year, with full system rollout slated for 2027.
The initial use case connects with data from the tax and customs agency, ARCA, combining open finance with open data models. Working groups are currently establishing authentication and consent standards to refine credit risk evaluation.
Mandatory Participation and Regional Frameworks
Mandatory participation rules will apply to key financial players based on market relevance, while other entities can join voluntarily.
The framework draws structural lessons from the United Kingdom’s decade-old open banking rollout and regional peers like Brazil and Uruguay.
Disclaimer: The information provided in this article is for educational and informational purposes only and does not constitute financial advice.
