Government launches plan to revive mortgage lending, boost real economy

Economy Minister Luis Caputo announced an ambitious AR$2 trillion (US$1.3 billion) plan on Wednesday to revitalize mortgage lending in Argentina. The funds, sourced from the Sustainability Guarantee Fund (FGS), will provide housing solutions for approximately 17,000 to 18,000 families. The FGS, managed by state pension agency ANSES, will guarantee long-term bank deposits, enabling them to issue more home loans.

While similar initiatives have been attempted before, including under former President Cristina Kirchner in 2009, the current plan represents a significant opportunity for the construction sector. Caputo emphasized that Argentina's mortgage lending only constitutes about 2% of GDP, far behind Chile's 27% and the US's 75%. The construction industry, which has suffered greatly due to the government's freeze on public works, stands to gain substantially from this initiative.

With over 1,600 companies and 80,000 jobs lost since November 2023, reviving construction is crucial. The AR$2 trillion will be distributed through auctions of AR$200 billion each, with the first auction set for the first week of September. Despite the banks' enthusiasm, the Association of Public and Private Banks of Argentina (ABAPRA) cautions that the program must ensure equal access for all financial institutions to foster balanced growth in mortgage lending.