How families in Milei’s Argentina sank deep into debt

Under President Javier Milei, Argentina has seen a sharp increase in debt delinquency among families. Nearly 5.8 million people, or 12.7% of the population, have fallen behind on debt payments for over 90 days, a figure that has tripled in the past year, reaching levels not seen in two decades. This crisis is attributed to a combination of stagnant incomes, a cost of living crisis, and Milei's austerity measures which have slashed subsidies for essential goods and services, leaving many struggling to make ends meet.

Andrea, a 32-year-old mother, spoke of her shame at being unable to repay a loan she took out a year ago. She tried to start a catering business to improve her situation, but the purchase of a new oven led her into further debt. Milei has refused to accept responsibility for the situation, questioning whether the individuals had no other options. Instead, the president of Buenos Aires Banco Provincia, Juan Cuattromo, attributes the delinquency to a macroeconomic context that has worsened incomes and employment.

The majority of unpaid loans are personal loans and credit cards, with interest rates exceeding 1,000%. Claudia Debaste, a 40-year-old single mother, is among those who have fallen behind, with her credit card bill becoming increasingly unmanageable. She is now seeking to reschedule her debt.

Milei's policies have been praised for curbing inflation, but the longer repayment periods and stagnant wages have left many families in a debt spiral. Easy access to credit from digital wallets, such as Mercado Pago, has further exacerbated the issue, particularly among teenagers and gig economy workers. Interest rates on these platforms can reach 1,375%, with payments deducted directly from workers' earnings. Critics, including the Workers Party, have accused Mercado Libre's CEO, Marcos Galperin, of usury.