Half a century of almost continuous inflation, devaluations combined with exchange rates to keep the dollar, which was the financial thermometer par excellence, at bay, had its inevitable consequence. Argentina is the country in the region with the smallest stock of credit destined for individuals in proportion to the size of its economy. Almost 10% of the total GDP is financing all types of short and medium-term consumer loans (mortgage loans, in addition, do not exceed 0.5% of GDP)against 50% of the Latin American average. Chile leads that ranking with just over 100%, followed by Brazil (76%), Paraguay (57%), Colombia (45%) and Uruguay (31%). A bad grade and a great opportunity: Argentina is the country with the most growth potential for the coming years.
The risk. “Although volatility and uncertainty continue to affect credit expansion, a very good recovery is observed in arrears and better payment awareness among new applicants”point Julian SanclementeCEO of Alprestamoa “fintech” that works by managing credits and also collaborating in their collection. “A predictable salary, even with inflation of 35% annually, reduces the risk of non-payment, generates predictability and is a key factor for credit expansion”he argues.
The present is not rosy. He Central Bank It states that 5.5% of total loans are in irregular form, but with an abysmal difference between that allocated to companies (2.5%) and that for families (9.3%). This situation has been slowing down the growth of the sectors that are most sensitive to credit expansion. Thus, all purchases of durable goods (cars, appliances, construction materials), tourism, education and even medical practices would have a higher demand if there were other terms with rates closer to that of the rest of the region.. That is the potential that is observed from within and that encourages betting on its growth by simply maintaining a certain macroeconomic balance. and that the State does not act as a great vacuum cleaner of funds, thus excluding individuals from credit.
The objective. In the recent legislative process for the approval of the labor reform there was an article (35) on the possibility that virtual wallets, in addition to banks, could receive salary income (“salary accounts”) and that opened the floodgates of a dispute that has been taking place in the market since the technological revolution welcomed new participants in the market. Banks maintain that there should be equal rules for all because they are subject to more regulations from the monetary authority. But, what they do not say out loud is that during the years when the Treasury had no one to ask, it was they who had to meet the demand for new financial instruments. Claudio Cesario, president of the Association of Argentine Banks (ABA), maintains that ““To be able to lend you need ‘raw material’: deposits”. And he summarized the warning that worries banks: if deposits leave the banking system, “credit, logically, becomes more expensive, especially for families and SMEs.” In this logic, the salary account is “the backbone of the system.” The leader added an element of trust: bank deposits have a guarantee of up to $25 million and invited to review whether in the last two decades there were employees or retirees who did not get paid due to bank failures.
For its part, the Argentine Chamber of Fintech maintained that the economy already works with digital payments and that real freedom is choosing where to charge. He comments that currently 28 electronic payments are made per adult per month (a ratio of almost 15 to 1 compared to cash withdrawals), attributed to digital accounts. For now, user behavior data shows the coexistence between both worlds and that trust remains key. A report of COELSA indicates that 72% of the 27 million personal users have an account in a bank and a wallet at the same time. There are 8 million with only a bank account (CBU) and 2 million with only a virtual account (CVU); Each Argentine has an average of 8 open accounts (4 of each type). That is to say: the system is already hybrid and the dispute is played over the most valuable flow: the salary.
A work by the consulting firm D’Alessio IROL shows that 37% continue to choose the traditional bank account as a “space to safeguard income”; 26% agree to charge either in bank or wallet; and 15% would do so in wallets under certain conditions, such as simple transfers or specific benefits. In addition, it marks greater openness among those under 34 years of age and more caution among those +55. And a key fact: at the lowest socioeconomic levels, the brake is not technological, but rather the perceived risk of “losing income” due to support failures.
The future. On this occasion, the discussion had a victory for the “traditional” entities, but the inertia of technological innovation is shaping the future. For example, Sanclemente shows data from his company’s performance as an example of the capabilities acquired by systems that interconnect both worlds: banks that are digitized (such as the recent operation of Macro with Personal by Personal Pay) and virtual wallets that buy patents from banks (such as Ualá and perhaps soon Mercado Libre). In the case of the Alprestamo platform, they receive between 850 thousand and one million credit applications per month, a volume that would require an enormous physical structure for a traditional operation (almost 1,000 people). The company operates with 52 people in six countries, placing an average of 20,000 monthly loans, in addition to cards and savings accounts, an efficiency that was unthinkable just 20 years ago. ““We work with many entities, we do business together and we can coexist because we know the strengths and weaknesses of each type of organization”he concludes. A path of coexistence that predicts new “rounds” in the dispute of a growing market, which would facilitate complementarity.
by Marcelo Alfano
