Credit card delinquencies are the highest in 28 months

Peruvian families are facing different difficulties in 2023 and one of them is to pay the acquired credits on time. Therefore, it is not surprising that delinquencies on credit and consumer cards have reached 6.02% and 3.90% – the highest rates recorded since July 2021 – respectively, according to data from the Superintendency of Banking and Insurance (S.B.S.) analyzed by economist Cesar Antunez.

At the end of October, credit cards, which are mostly issued by banks, The default rate has been increasing for four consecutive monthsespecially due to the decrease in production and employment levels, says the specialist.

With respect to consumer credits, which groups together all types of credits that a family can acquire such as cards, loans freely available, loans by agreements, vehicle credits, among others; The delinquency rate has been growing for seven months in a row.

This result is explained by the deterioration of economic activity; the decrease in the employed population, which is accentuated in the agricultural and construction sectors; the climatological anomalies associated with the El Niño Phenomenon; and the decrease in investment spending in the private sector. “In addition, to the contraction in inventory levels in companies: the less stock, the less labor.” Antunez specified.

Likewise, the number of consumer credit debtors as of September 2023 reached 5.4 million, out of a total of 8 million unique debtors in the financial system, with a year-on-year growth in October of 3.4%.

It should be noted that, As of October, consumer loans totaled S/74,069 millionincreasing by 10.84% ​​compared to the same month of the previous year, while the placement of commercial banking credit cards stood at 6 million 459,000 units, a reduction of 2.71%, compared to the same month in 2022, according to he INEI.

Trend will continue

The economist added that the upward trend in the default rate will continue until March 2024, “as long as the El Niño phenomenon is of ‘moderate’ intensity. However, its slope could increase if it is ‘strong’, especially on the northern coast of Peru,” he noted.

For those who maintain debts pending, Antunez recommends using the CTS funds—which can still be withdrawn until December 31—and the bonus to pay the largest loans because they are the ones that charge the most interest. In addition, prepay the loans, since doing so before the indicated date also generates interest savings.

Only one box issues credit cards

Of the 12 municipal savings banks, only Cusco issues credit cards and began placing 23 cards in February 2023 and closed in October at 1,594 units.

Although according to the new regulations, 9 boxes could issue this product, in Antunez’s opinion, they do not do so due to technological barriers, since they do not have a system according to their functionality (doing matching all day to issue the balances, for example).

Besides, For it to be a profitable business, they must place at least 15,000 cards.

Data

• Living place. Mortgage loans grew 4.86% in October and stand at S/63,094 million, according to the INEI.
• Companies. Corporate loans fell 8.10%, at S/215,971 million.