A surge in Argentinian households taking on debt to cover existing debts is raising concerns about financial stability, according to a recent post on social media by Informatesalta. The trend, dubbed “credito para pagar credito” (credit to pay credit), highlights a deepening cycle of indebtedness among Argentinians.
The issue is underscored by a 2022 study by the Ministry of Social Development and the National University of San Martín, cited in a recent regulatory update by the National Directorate of Consumer Defense and Arbitration. The study revealed that between 2003 and 2019, the percentage of Argentinian urban households accessing some form of credit rose steadily from 35% to nearly 62%. This increase coincided with a shift in access to basic rights – housing, health, education, and food – becoming increasingly mediated by access to financing.
Experts define over-indebtedness as a financial state where individuals lack sufficient income to meet their debt obligations. According to Argentina’s government website, this occurs when debts exceed income, rendering them unaffordable. The causes can range from taking on excessive debt to unforeseen circumstances like job loss that disrupt income streams. The government advises that debt should ideally not exceed 40% of monthly income.
The Disposición 11/2023, published by the National Directorate of Consumer Defense and Arbitration, defines over-indebtedness and introduces concepts like “responsible credit” – placing a duty on lenders to prevent and advise against unsustainable borrowing. The regulation also acknowledges “social force majeure” as a contributing factor to over-indebtedness.
Legal scholar Lidia Vaiser, writing in Microjuris, notes a growing recognition of consumer vulnerability in relation to debt, particularly within the context of consumer protection law. She points to evolving interpretations of the 1993 Law 24.440, initially focused on individual rights, now impacting commercial law and the financial activities of businesses.
The Argentina.gob.ar website outlines steps for individuals facing over-indebtedness, emphasizing early action, avoiding high-interest “quick loans,” seeking professional assist, budgeting, prioritizing debts (particularly those secured against housing), minimizing expenses, and negotiating with creditors. Negotiation should start with priority debts, involving contacting creditors to verify amounts and request payment plans.
While the government provides guidance on managing debt, the underlying economic pressures contributing to the problem remain. The study cited in the recent regulatory update points to a changing landscape where access to essential rights is increasingly tied to the ability to secure financing, creating a precarious situation for many Argentinian households.