Non-Financial Credit Providers: Credit Grew 20% in the Second Half of 2021

Credit granted by non-financial credit providers (PNFCs) grew 20% at constant prices in the second half of 2021, and the number of borrowers went up 21% in the same period according to the BCRA's half-year report.

Non-bank credit card loans increased 13% in real terms in the same period, showing the highest share in the total stock (55% as of the end of 2021). The other types of loans, personal lending in particular, grew 30% at constant values.

According to the report of the BCRA, the non-performance ratio of PNFC borrowers decreased 4 percentage points during the second half of 2021, reaching 13% in December. This is explained by a drop in the supply of new loans.

This report has a methodological change: non-bank credit card issuers (ETCNBs) are included for the first time. As a result, PNFCs registered with the BCRA reached 444 companies in March 2022 (25 were added and 23 removed since June 2021), and were sorted out as follows: 325 other non-financial credit providers (OPNFCs), 79 ETCNBs, and 40 providers registered in both categories.

Other relevant data of the report:

Total debtors and average debt: The number of PNFC borrowers reached around 8.8 million persons by the end of 2021. However, the average total debt per credit product decreased in the second half (-3% in real terms).

Number of reporting companies and interest rates on personal loans: In December 2021, around 67% of registered OPNFCs reported the annual percentage rate (APR) on personal loans. Fintechs exhibited the highest number of reporting companies (84%).

The weighted average APR charged by OPNFCs stood at 114% by the end of 2021, a figure comparable to that of June 2021. Fintechs continue exhibiting the highest interest rates (126% in December 2021), while cooperatives and mutual associations charge the lowest rates (84%).

Number of reporting companies and interest rate for loans on credit cards: Seventy-two percent of registered ETCNBs reported their interest rates in December 2021. The simple average APR stood at 63%.

Number of PNFC borrowers sorted out by type of person, gender and age group: Almost all of the 8.8 million PNFC borrowers are natural persons (99%). Women evidenced the highest positive performance in the second half as regards quantity (+24%). As regards age, most debtors belonged to the 30-64 age group (68% share in December 2021), while people under 29 years old exhibited the highest increase (+109% compared to June 2021).

Around 4.6 million persons were borrowers of PNFCs only by the end of 2021.

Total stock of financing granted by PNFCs sorted out by type of person and gender: Natural persons held the highest stock of loans of PNFCs (91%) in the six-month period under analysis. In this context, women reached a high in terms of share since January 2018, representing 48% of PNFC financing in December 2021.

Age gap: The highest stock of debt to PNFCs is observed in the middle-aged group (from 30 to 64 years old)—ARS357,000 million in December 2021. However, the youngest age group recorded the highest year-on-year increase in real terms—76% in December 2021.

Financial institutions’ financing to PNFC clients: Over 4.2 million borrowers had to pay debts owed to PNFC's and to financial institutions in December 2021, up 12% compared to June 2021. The number of credit products granted followed a comparable trend, increased 10% compared to June 2021 (8.3 million). The stock of debt increased 9% in real terms compared to June 2021.

PNFCs funded by financial institutions: During the period under analysis, PNFCs' debt with the financial system continued to rise, up 15% in real terms against June 2021 (ARS64,500 million in December 2021).

Non-performance ratio of PNFCs for loans granted by financial institutions: The non-performance ratio of debt with financial institutions went on declining—4% in December 2021. The non-performance ratio of home appliances stores continued to be the highest, though following a decreasing trend (down 8 p.p. in the second half of 2021).

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August 12, 2022.

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