The fintech come to the rescue and offer loans to the middle class punished by the crisis

Access to personal credit and card financing became unviable alternatives for some families, especially for the sector of former employees who became monotributistas.

This segment finds in fintech companies an alternative to their need for pesos to settle debts, advance their business or change the car.

The trend is already evident in the market figures: while the amount of credits granted by traditional banks, some Fintech companies register an increase of up to 70% in the demand for loans.

Traditional banking
According to the data of the Central Bank, the amount of money granted in personal loans and credit cards through traditional banking added $ 73,884,905 in August against $ 96,534,641 in July.

"The current stock of personal loans and credit cards represents 49% of total loans, while advances and documents, which more companies use, reach 28% of the total," explained Alejandro López Mieres, of the Thought Institute and Public Policies, iProUP. In this way, the total stock of loans including mortgages exceeds 1.5 trillion pesos.

In his opinion, when taking "a comparative base of twelve months, you see a fall in the credits, call or balances of cards, because families are already in debt."

Also the leader of Free Consumers, Hector Polino said that "families are indebted and proof of that is that along with the gas bill, a company sends to households the advertising of a financier willing to grant credits to pay that tax", in dialogue with iProUP.

In this sense, Lopez Mieles added that "the year-on-year dynamics of the credits begins to show the recessive element" because "the payment capacity" of the clients is saturated.

"In the first instance, people saturated their credit capacity in front of the formal system, now they resort to an alternative system, where rates are prohibitive and where the level of delinquency will increase," the analyst said.

In the financial sector, different actors consulted by this means pointed to the fintech as the "alternative" or the "new way" of funding for the professional middle class.

Sources from different traditional banking entities acknowledged that there is a "restriction" in access to credit because "we are in a market situation where there is a high level of interest rates that -in particular in the last four-month period- contributed to depress the placement of credits at system level ".

From the Credicoop, indicated that "from the escalation of the dollar and the policy of the BCRA, to increase bank reserves, among other factors, the cost of money became more expensive".

Thus, between September 2017 and May 2018, "the average monthly growth of the personal loan portfolio of the financial system was of the order of $ 12,000 million, while in June and September that average went to $ 4,800 million monthly ". And for October they expect "similar behavior".

In this entity, personal loans average $ 80,000 in August and in September they observed "a slight drop in average loans settled".

For its part, 70% of the loans granted by the ANSES since December 2015 corresponded to beneficiaries of the Universal Allocation per Child, 58% of the universe lending to non-contributory pension holders, 33% to those of the allocation system family members (SUAF) and 25% to workers in a dependent relationship (SIPA), according to data provided by the agency's press office.

The evolution of the loans is seen the impact of the inclusion of credits for holders of the AUH, arranged in July of last year. For this group, in August of last year, loans were granted for $ 5,416.30 million. Last July, the figure dropped to $ 235.5 million.

Fintech to the rescue
In the Fintech world, as if it were the world in reverse, Juan Pablo Bruzzo, CEO of Moni, considered that in the credit takers there is a "certain caution, which responds to the maturity of the client, who in the current situation prefers to wait take credits. "

On the other hand, the Afluenta manager, Alejandro Cosentino, indicated that in his company the demand for credits registered an increase of 70%.

"We see a more selective demand, between which it consults and that defines the taking of the loan", said in dialogue with iProUP. However, he stressed that "we do not see a drop in demand in absolute values", especially in the target of this company that takes on average loans for $ 8,000 payable in three installments.

Bruzzo, whose company triples its annual metrics, stressed that "in general banks are restricting access to credit, so there should be more demand, but there is some caution until we know what happens in the real economy."

In this regard, he assured that "most of the loans were granted in the last 18 months." He added that even in these months of exchange, agreement and disagreement with the IMF, foreign investors "see potential growth in Argentina." As always, investors "demand economic stability and clarity of rules."

In the case of Afluenta, Cosentino revealed to iProUP, the demand for loans increased 70% and the company originated 50% more credits than a year ago. "In this company, the average loan went from $ 40,000 last year to $ 70,000 in September .

The executive also said that 20% of the loans are taken "to cancel debts, especially for the balance of the credit card that offers a refinance 25% more expensive", another 30% to "improve the house, before the fall of the mortgage loans "and another 20%" for things related to the car ", which goes from an arrangement to the change for a better car or for a 0km.

He also noted that taking credit to avoid falling into the trap of the minimum payment of the card is one of the cases that grew "enough" in the last six months.

He also added that 15% of the Affluentes customer portfolio -as he calls his users- are "SMEs, but mostly monotributistas and self-employed", a segment of the demand "to which the banks escape, because they have no income fixed. "

"We give them credits to renew stock, or buy merchandise, we are fast and have different interest rates according to the segment," he added.

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