Peru’s Banking Shift: Why Credit is Tightening and What It Means for Consumers

A cautious wave is sweeping through Peru’s banking sector. Just as individual financing began to show signs of recovery, a recent survey by the Central Reserve Bank of Peru (BCRP) reveals a significant shift: banks are preparing to tighten credit conditions in the final quarter of the year, precisely when consumer spending typically surges. This isn’t a typical seasonal adjustment; it’s a response to a complex interplay of political risk, economic uncertainty, and evolving consumer behavior.

The Political Shadow Over Lending

The looming specter of Peru’s upcoming electoral process is a primary driver of this conservative approach. Banks, still mindful of the economic disruption caused by the unexpected outcome of the 2021 elections – and the subsequent market volatility following Pedro Castillo’s presidency – are bracing for potential instability. As Víctor Blas, strategy and finance manager at Financiera Confianza, explains, “The political risk is present because there is the precedent of 2021… That is why companies will tend to be more conservative when hiring staff and improving salaries, in the face of the elections.” This caution isn’t limited to lending; it’s impacting hiring decisions and overall business investment.

Beyond Politics: Economic Headwinds

Political uncertainty isn’t the sole factor. Jorge Chávez, president of Maximixe, points to expectations of slower economic growth in 2026 as another key concern. While Peru has benefited from a boom in gold and copper exports this year, these gains are not expected to be sustained. This moderation in private investment, coupled with the potential for unsustainable spending fueled by advances from AFP (private pension) funds, is prompting banks to reassess their risk profiles. The concern is that consumers are increasingly relying on credit cards to maintain a spending level that isn’t supported by underlying income growth.

A Shift in Lending Focus: From Broad Access to Affluent Clients

The tightening of credit conditions will manifest in several ways. Banks are unlikely to launch aggressive debt purchase campaigns, lower interest rates, or extend credit lines as they typically do during the holiday season. Instead, they’ll adopt a restrictive stance, focusing on borrowers with greater purchasing power. As Blas notes, institutions will prioritize lending to “affluent clients – one step below premium clients – and above.” This represents a deliberate move away from broader access to credit towards a more selective approach.

Key Takeaway: Expect more stringent requirements for loan approvals and credit card applications in the coming months, particularly for those with lower credit scores or limited financial history.

The Lingering Impact of Delinquency

The current conservatism is also rooted in past experiences. Previous deterioration in the quality of consumer loan portfolios led banks to implement more restrictive policies, and these policies remain in place. While the overall default rate has stabilized, delinquency remains high among consumers in lower income brackets (strata C and D). Banks are carefully “netting” portfolio write-offs – essentially removing bad loans from their balance sheets – which reveals a higher underlying risk than headline default figures suggest.

What This Means for Consumers: Navigating the New Credit Landscape

For the average Peruvian consumer, this shift means a more challenging credit environment. Securing loans or credit cards will likely become more difficult, and interest rates may remain stable or even increase. Here’s what you can do to prepare:

• Review Your Credit Report: Ensure your credit history is accurate and address any errors.
• Reduce Debt: Prioritize paying down existing debt to improve your creditworthiness.
• Save for Purchases: Avoid relying on credit for large purchases whenever possible.
• Shop Around: Compare offers from different banks and financial institutions.

Expert Insight: “The banks have taken note of this particular scenario, made more complex by the electoral uncertainty and, in this part of the year, they will make a change in their strategy and adjust their policies,” says Blas. This isn’t a temporary blip; it’s a strategic recalibration.

The Future of Credit in Peru: A Prolonged Period of Caution

The BCRP survey suggests this conservative trend will likely persist at least through the first quarter of 2026. The combination of political risk, economic headwinds, and lingering concerns about consumer debt paints a picture of a prolonged period of caution in Peru’s banking sector. This doesn’t necessarily signal a credit crunch, but it does mean consumers should prepare for a more selective and demanding lending environment.

Frequently Asked Questions

Q: Will I still be able to get a loan or credit card?

A: Yes, but the approval process will likely be more rigorous, and you may need a stronger credit history and higher income to qualify.

Q: What is the impact of the AFP funds on this situation?

A: While AFP advances provide some consumers with more disposable income, banks are concerned that this is leading to unsustainable spending patterns and increased reliance on credit.

Q: How long will these tighter credit conditions last?

A: The BCRP survey suggests this trend will continue at least through the first quarter of 2026, influenced by political uncertainty and economic forecasts.

Q: What can I do to improve my chances of getting approved for credit?

A: Focus on improving your credit score, reducing existing debt, and demonstrating a stable financial history.

What are your predictions for the future of consumer credit in Peru? Share your thoughts in the comments below!

For more information on managing your finances, see our guide on personal finance tips.

Stay informed about the latest developments in the Peruvian economy by exploring our economic news section.

Learn more about the BCRP’s survey and analysis on their official website: BCRP.