Banks project that they can expand credit to 25% of GDP in a year and a half

The president of the Asociación de Bancos Argentinos (ADEBA), Javier Bolzico, reviewed the main achievements of the Argentine financial system and highlighted the challenges that still remain to expand access to credit in the country.

Before an audience composed of bankers and journalists, Bolzico emphasized that loans to the private sector doubled in the last year, rising from 40 to 90 trillion pesos in constant values, which represents approximately 7% of GDP.

“Last year we said that the financial system was in a position to finance the economic recovery, and so it was”, he stated. He attributed this expansion to measures taken by the Government of Javier Milei, such as the elimination of the fiscal deficit, the end of uncontrolled monetary issuance, and the liberalization of interest rates by the Central Bank.

"The next goal is to bring banking penetration to 25% of GDP in the coming years and from there move toward the levels of the region, around 50%", he assured. Later, in a conversation with journalists, he specified that this first objective could be achieved by the end of 2026.

One of the most notable aspects was the return of long-term mortgage loans. According to Bolzico, currently about 3,000 families per month are accessing financing for home purchases with terms of 10, 20, and even 30 years, something that had not been seen in the country for a long time.

Meanwhile, the banking system played a key role in the process of asset disclosure, through which more than 13 billion dollars were regularized in an orderly and transparent manner. “The majority of those funds remained in the financial system and a portion was converted into loans”, he detailed.

Increase in bank credit

Among the challenges still pending, the head of ADEBA warned that bank credit in Argentina barely reaches 11% of GDP, far from the regional average of around 50%. To reach the 25% target within a year and a half, Bolzico proposed an agenda based on five lines of action:

• Ensure macroeconomic stability and reduce distortionary taxes such as the check tax, Gross Income, and municipal rates, which increase the cost of credit.
• Modernize the Central Bank's regulatory framework, with the aim of promoting innovation without neglecting deposit protection.
• Eliminate obsolete regulations that still affect the efficiency of the financial system.
• Advance deeper deregulation, removing obstacles from both the public and private sectors that increase the cost of services.
• Promote long-term savings, which is key to boosting mortgage loans and production financing.

“Private banking is ready to finance growth. The system needs the State to continue creating favorable conditions”, Bolzico concluded.