When Buenos Aires traffic authorities impound a motorcycle, the route back to earning an income often runs through the lending features embedded in the very apps that provide work. Albert Quintero, a 41-year-old courier, says his daily take averages 70,000 pesos ($46), but reclaiming an impounded motorcycle can set him back roughly 140,000 pesos ($90) in fines and fees. Many workers in his position lack the cash to cover such costs and resort to borrowing.
More app-based workers are turning to fintech credit products, including loans extended by the delivery platforms that connect them to customers. Those loans can carry very high nominal interest rates: PedidosYa is offering riders credit at a 131% annual rate, while the digital wallet Personal Pay charges roughly 170% annually.
As households confront elevated living costs and uncertain job prospects, fintech apps have assumed a prominent role as a source of credit. They also provide a lens on how families and workers are responding to President Javier Milei’s economic program, which has introduced fiscal tightening and other reforms that have further squeezed household budgets.
Industry figures point to a dramatic expansion in fintech lending. Mariano Biocca, executive director of the Argentine Fintech Chamber, says the sector has grown 20-fold, reaching 10 million individual loans compared with 500,000 loans six to seven years ago. That growth comes as inflation has decelerated and financial stability indicators have improved enough that banks and digital platforms are more willing to lend. At the same time, government austerity measures, including cuts to subsidies, have reduced disposable incomes and elevated demand for credit.
Repayment stress and record arrears
With the expansion of credit has come rising distress. Estimates compiled by the Fintech Chamber indicate that nearly 6 million people are more than 90 days behind on repayments, a backlog that represents almost a third of all borrowers tracked in the industry group’s figures. Central bank data show the ratio of bad loans among households rose to 12.8% in June, the highest level recorded since the data series began in 2010. That share stood at 2.8% when President Milei took office in late 2023.
Analysts say the deterioration in household loan performance is linked not only to squeezed incomes but also to a shift in borrowers’ experience of credit. A generation of borrowers who had grown used to inflation reducing the real burden of debt is now contending with sharply positive real interest rates. Many of the credits being extended by fintech and digital-wallet lenders carry nominal interest rates in the triple digits, increasing the cost of servicing outstanding loans.
A report by consultancy Analytica highlighted young people as especially affected by bad debt. Enrique Tobani, who participated in an August protest outside the Economy Ministry in Buenos Aires calling for debt relief, underscored the visibility of the problem in daily life: "They get easy money from digital wallets, but they don’t see the interest they are paying," he said. "Every neighbor, family member, worker you speak to, everyone is going through the same situation."
Political and policy responses
Calls for state-backed debt relief have come from unions, consumer groups and advocacy organizations, but the Milei administration has largely resisted those demands. Officials have framed rising household debt primarily as a private-sector issue and suggested that unpaid loans are a temporary feature of efforts to expand Argentina’s private credit market. Even with the current expansion, the credit market remains small relative to some regional peers, at about 12% of GDP, according to the characterization in public commentary referenced by industry representatives.
Observers warn that growing personal indebtedness could carry political repercussions. With concern over employment emerging as a top issue for voters in some public opinion measures, analysts say the spread of precarious jobs, constrained consumption and elevated household debt could pose political challenges for the government ahead of the 2027 election. "A stronger external account will not bring him success in the 2027 campaign if household debt, weak consumption and precarious employment keep defining daily life," said Mariano Machado at risk consultancy Verisk Maplecroft.
Credit access and lending practices
Fintech firms have extended credit to people who lack stable incomes or formal employment, according to the Fintech Chamber’s executive director. Traditional banks, by contrast, often impose requirements that many gig workers cannot meet. "They ask for requirements that are too demanding," said Marcelo De Mattei, a 44-year-old delivery rider who supplements his income by courier work and reports earning about $13 daily.
To address the surge in arrears and industry concerns over borrowing costs and accounting treatment, banking groups and fintech companies are advocating changes. The banking association ABAPPRA proposed modifications on August 28 to central bank rules that would grant lenders greater flexibility in classifying borrowers in arrears and accounting for overdue loans. Proposals from industry groups also include calls for lower taxes on loans as a means to reduce borrowing costs for consumers.
Civic responses
Civic groups and advocacy organizations have been vocal at public events. At the Buenos Aires protest, Oriana Fernández of advocacy group Organized Debtors said loans have become a mechanism for meeting essential needs. "We see that people are going into debt to cover their basic needs and everyday expenses," she said.
The combination of expanded access to digital credit, high nominal interest rates, cuts to subsidies and fragile household incomes has produced a complex policy challenge. The dynamics are visible in the daily choices of app-based workers, who may take on costly debt to continue earning, and in the rising share of household loans classified as non-performing across official statistics.
The situation presents immediate implications for consumer-facing sectors and financial services: higher household leverage and increased arrears can weigh on consumption of goods and services, while lenders and fintech platforms face credit risk and regulatory scrutiny as repayment difficulties mount.