Barclays reports that across Latin America overall credit growth has lost momentum as tighter financial conditions take hold, and the bank finds early signs of deteriorating asset quality where debt service demands have risen.
In Brazil, lending continued to expand despite monetary tightening by the central bank in 2024-25, but the pace has slowed. Total credit concessions rose 4.2% in real terms in the 12 months ended in March, down from 10.4% a year earlier. The deceleration was concentrated in market-rate credit, which grew 4.1% compared with 11.2% previously. Outstanding credit lines now equal 55.8% of GDP, up from 54.7% a year earlier.
Household balance sheets in Brazil show increasing strain. The share of household income devoted to debt service reached a record 29.7% in February, up from 26.2% two years earlier. Non-performing loans rose to 5.3% of household credit in March, from 3.9% a year before.
To address borrower distress, the Brazilian government relaunched a debt renegotiation program for a 90-day period that allows low and middle-income borrowers to restructure outstanding debts with discounts ranging from 30% to 90%. The program is backed by a credit guarantee fund mobilizing as much as 15 billion reais in financial resources.
Mexico has seen a pronounced slowdown in bank credit to the private sector. In real terms, annual growth was 1.8% in April, a sharp deceleration from 9.0% in April 2025. The expansion that did occur was driven by consumer credit, which rose 7.1%, and housing credit, which inched up 0.4%. Credit to firms contracted by 0.7%. Non-performing loans edged up modestly to 2.4% of the total portfolio, from 2.2% in April 2025.
Argentina's credit channel remains comparatively shallow: bank credit to the private sector stands at less than 10% of GDP, while total deposits in the banking system amount to roughly 12% of GDP. Within that constrained system, lending to the private sector is approximately 67% of peso deposits, up from 33% in May 2024.
Colombia is experiencing a sharp deceleration in new loan disbursements. The three-month moving average of credit growth moderated to 9% as of April 2026, down from around 40% in October.
Ecuador, by contrast, recorded a current account surplus of approximately 6% of GDP last year, and credit growth has remained strong. Lending expanded at an annual rate of 10%, supporting consumption and investment.
Peru has seen accelerating credit growth, with expansion running at 8% annually in the first months of the year. Barclays notes this uptick likely reflects the easing of monetary policy through last year.
Across Central America and the Caribbean there is notable variation in credit penetration. Panama, El Salvador, and Costa Rica report credit to the private sector equal to 68%, 53%, and 51% of GDP respectively. The Dominican Republic and Guatemala show lower shares at 31% and 36%.
Barclays' regional overview underscores a mixed landscape: some countries are seeing credit conditions tighten and asset quality pressures emerge, while others maintain robust lending or show constrained banking intermediation.