Report on Non-Financial Credit Providers

Half-yearly report on the evolution of loans granted by non-financial institutions and the profile of those who access it.

Summary

PNFC Quantity | In August 2024, the total number of PNFCs registered with the BCRA reached 486 companies, with 32 companies registered and 6 deregistered compared to December 2023.

Financing Balance | The financing balance of the PNFCs reached $4.9 trillion as of August 2024, 18% higher in real terms compared to the end of 2023 and 32% compared to March 2024, the month in which the historical minimum of the series was recorded. The groups that explained the increase in balances in the year were Other providers (+13.2 p.p. of the variation, mainly associated with credit cards) and Fintech (+4.6 p.p., linked to personal loans).

When analyzing the balances of financing granted according to the type of assistance, a greater recovery was observed in the first eight months of the year in credit card assistance (+23%) than in those corresponding to personal loans and other assistance (+11% in both cases).

Interest Rates | In line with what was observed on the balance side, where credit card financing increased more than personal loans, the compensatory interest rate applied to credit card financing contracted to a greater extent than the interest rate on personal loans. While ETCNB’s compensatory interest rate fell 89 p.p. between December 2023 and August 2024 (reaching 77% in the latter month), OPNFC’s personal loan rate decreased 76 p.p. in the same period (standing at 141% in August).

Irregularity | The total irregularity of the PNFC portfolio registered a decrease so far this year, continuing the trend that began in the second half of 2023, reaching an all-time low of 7.6% in August 2024.

This aggregate dynamic was explained by the significant drop of 8.5 p.p. in the irregular rate of personal loan balances, partially offset by a 0.5 p.p. increase in the irregularity of credit card balances.

At the level of PNFC groups, all registered falls in their irregularity ratios with the exception of Other business chains. The group with the best performance was Fintech, which showed a reduction in its irregular rate of 9.6 p.p.

Relative size of credit granted by NFPs compared to those granted by LESPs | As of August 2024, the PNFCs had assistance granted to more than 8.5 million PH debtors, which represented 67% of the debtors in the financial system. If only the exclusive debtors of the PNFCs are considered, this proportion is reduced to 29%, equivalent to 3.8 million debtors.

In August 2024, the total financing portfolio of the PNFCs represented 17% of those held by the PHs with the SF, and only 4% if the analysis is limited to exclusive debtors.

Debt of PNFC clients to the EEFF

Number of debtors and assistance | During the first half of 2024, an increase in the number of PH debtors and total assistance was observed, of 8% and 9% respectively, reaching 5.6 million shared debtors, with more than 11 million assistance from the EEFF as of June 2024.

Funding by Type of Assistance | The total balance to PH reached $7.6 billion in the first half of 2024, 10% more at constant prices compared to the end of last year. The number of personal loans to PH as of June 2024 increased 20.6% compared to December 2023, while credit cards increased 3% in the period.

Irregularity of debtors shared with EEFF | The irregularity with the SF of shared debtors remained at values similar to the previous semester, standing at 4.9% as of June 2024.

Funding of NFPPs with the ESFFs and in the capital market

Funding of the PNFCs with the SF | The total debt of the PNFCs with financial institutions amounted to $893,000 million in August 2024, 37% more at constant prices compared to December 2023.

Irregularity of the PNFCs with the ESFFs | The NPFC debt irregularity rate with the LFSE decreased 0.9 p.p. in the period, standing at 0.6% in August 2024, the lowest figure since April 2018.

Funding of PNFCs in the capital market | In the first half of 2024, FF were issued for $227,000 million at June 2024 prices, an all-time low since 2018, with a 34% drop compared to the previous semester in real terms.

Box and Sections

The report includes a box comparing the performance of Fintech PNFCs and digital financial institutions in granting financing. In addition, it has two sections: one analyzes the possible contributions of open banking initiatives in the financing of the financial system to individuals (within the framework of the experiences of different countries), while the other addresses the impact of new artificial intelligence models on the provision of loans.