BUENOS AIRES, Sep 4 (Reuters) – When traffic authorities seize a delivery rider’s motorcycle in Buenos Aires, returning to work may depend on taking on costly digital loans, fueling a debt cycle that is increasingly tying Argentina’s self-employed workers to the apps they rely on for income.
Albert Quintero, a 41-year-old delivery rider, earns on average 70,000 pesos ($46) per day delivering meals for trips. But recovering a seized motorcycle can cost about 140,000 pesos ($90) in fines and fees, a bill that, he says, many workers cannot cover without resorting to loans.
Increasingly app workers are turning to fintech loans, including credit offered by the very delivery platforms they work for, despite interest rates that frequently reach triple digits.
Apps like PedidosYa offer loans to couriers at an annual rate of 131%, while the digital wallet Personal Pay charges around 170%.
“There are many who don’t have money,” Quintero said, and that is why they end up in debt.
As families in Argentina face rising living costs and concerns about employment, fintech apps are becoming an important source of credit. They also increasingly offer a view of how workers and families are dealing with President Javier Milei’s economic reform, which includes austerity measures that have affected Argentine families already under financial strain.
The country’s fintech lending sector has grown twentyfold, reaching 10 million individual loans, compared with 500,000 six or seven years ago, according to Mariano Biocca, executive director of the Argentine Chamber of Fintechs, an industry group.
This growth occurs as Milei’s reforms begin to reshape Argentina’s financial system.
For years, runaway inflation, repeated recessions and sovereign debt crises discouraged lending. As inflation slowed and economic stability improved, banks and digital platforms began to extend more loans, while government austerity measures, such as subsidy cuts, tightened family budgets, increasing demand for credit.
Payment Difficulties
Nearly 6 million people are more than 90 days late on payments, representing almost a third of all borrowers, according to estimates compiled by the Chamber of Fintechs. The share of delinquent loans among households rose to 12.8% in June, the highest level since records began in 2010, according to central bank data, and up from 2.8% recorded when Milei took office in late 2023.
Analysts say the shift goes beyond the economy. Borrowers, accustomed to high inflation eroding the real value of their debts, now face sharply positive real interest rates—often in the triple digits—making loan repayments more expensive. A report by consulting firm Analytica found that young people have been the most affected by defaults.
“They can get money easily through digital wallets, but they don’t realize the interest they are paying,” said Enrique Tobani, who participated in a protest in August outside the Ministry of Economy in Buenos Aires, demanding debt relief.
“Every neighbor, family member, worker you talk to, everyone is going through the same situation,” Tobani said.
Calls for Debt Relief
The Milei government has resisted, so far, appeals from unions, consumers and advocacy groups for state-backed debt relief and, instead, has characterized rising family debt as an issue between private parties. Authorities described delinquent loans as a temporary consequence of efforts to expand Argentina’s private credit market.
With job concerns in Argentina now outranking inflation in public opinion surveys, analysts say personal indebtedness could become a political issue for Milei before the 2027 elections.
“A stronger external account won’t win you the 2027 campaign if household debt, weak consumption and precarious employment continue to define daily life,” said Mariano Machado of risk consultancy Verisk Maplecroft.
Although inflation has eased, many say incomes have not kept pace with the cost of living, forcing families to rely more on credit to cover daily expenses.
Fintech companies have been lending to those without stable income or formal employment, according to Biocca.
“They demand very strict requirements,” said Marcelo De Mattei, a 44-year-old delivery rider, referring to traditional banks. He works as a courier to supplement his income, earning about $13 a day.
Banking groups and fintech firms are calling for a reduction in loan taxes to lower financing costs.
The banking association ABAPPRA proposed, on August 28, amendments to central bank rules that would give lenders greater flexibility to classify delinquent borrowers and account for overdue loans.
At the protest in Buenos Aires, Oriana Fernández, from the advocacy group “Organized Debtors,” said loans are becoming increasingly a way to survive.
“We see people taking on debt to cover their basic needs and daily expenses,” she said.
