Due to the Drop in Inflation, Personal Loans Tripled in 2024.

The last year has been particularly dynamic for the Argentine financial sector. With the arrival of Javier Milei's government, benchmark interest rates exceeded 100%, setting a floor for products like fixed-term deposits and generating speculation about possible increases to absorb the excess pesos in the market.

Currently,  the effective annual monetary policy rate stands at 33.63%, without a mandatory floor for banks, and with the possibility of further reductions throughout the year in line with the deceleration of inflation.  This new context has redefined the rules of the game for the supply and demand of financial products, significantly impacting personal loans.

The rise of personal loans

According to the latest monthly monetary report from the Central Bank of the Argentine Republic (BCRA), the amount allocated to personal loans in pesos grew from $2.01 trillion in January 2024 to $10.7 trillion in January 2025. This represents a real year-on-year increase of 204%, discounting the effect of inflation.

Economist Damián Di Pace, director of the consulting firm Focus Market, explained to Infobae that this expansion is directly associated with the rate cuts. "The cut in the monetary policy rate doesn't encourage banks to stay in BCRA bills, so part of those funds are redirected to loans for the private sector", he noted.

Destination of funds

According to Di Pace, the demand for private credit is oriented toward various purposes:

• Durable goods: cars, motorcycles, appliances, and household items.
• Mortgages: in recovery after years of stagnation.
• General consumption: financing everyday expenses through personal loans.

"The greatest demand is in durable goods and technology items. Sectors that require financing are capitalizing on the greater supply of credits," the economist highlighted.

Generalized credit expansion

While the growth of personal loans was outstanding, all lines of credit experienced an increase in the last year:

• Mortgage loans: real increase of 84.9%.
• Pledge loans: increase of 95.1%.
• Loans through "documents": growth of 99.9%.
• Advances: rise of 72.2%.
• Credit card financing: growth of 66.8%, rising from $5.1 trillion to $14.9 trillion.
• Loans classified as "others": increase of 105.7%.

In total, loans to the private sector went from $15.6 trillion in January 2024 to $54.2 trillion in January 2025, with a nominal increase of 246.7% and a real increase of 98.7%, implying that the volume of money granted by credits doubled in a year.

Future prospects

The financial sector is undergoing a reconfiguration process, with less dependence on BCRA bills and a greater role for private credit.

Di Pace anticipates that "throughout the year we'll see more rate cuts, which could further encourage the growth of financing for consumption and durable goods".

If inflation continues to decline and rates keep falling, the positive trend in loans could consolidate, reinforcing the economic reactivation and the consumption capacity of Argentine households.