Ualatogether with a regional market research consultancy, presented a report on perceptions regarding credit and financing, focusing on Argentina, but also addressing Mexico and Colombiawith a total of 3,000 cases, evenly divided between men and women of 16 to 65 years with a common denominator: Everyone has a bank account or virtual wallet.
The presentation was given by Mariela MociulskyCEO of Trendsity and Andres Malatondirector of credit at the Argentine fintech. The report revealed that 57% of Argentines have requested a loan at some point and only two out of 10 respondents consider that access to this tool in the country is good.
It happens that the perception that interest rates are high (or the lack of knowledge of them), as well as the instability of the Argentine economy, generate fear of indebtedness. These factors, which have a background lack of financial educationresult in a preference for informal loans, “How to ask family or friends for money”.
The research is conclusive in pointing out that the relationship with credit is marked by tensions and prejudices, but this is not something unique to Argentina, but rather to the challenging economic-financial context in the region and which, for obvious reasons, may be exacerbated in the country. According to the study, 22% of Argentines avoid taking out loans due to high interest rates, 17% because of the country’s economic instability and 13% because of the fear of debt..
Prejudices, fears and distrust
According to the data from the study, 60% of respondents believe that taking on debt in Argentina “It is a problem”; 42% prefer to ask a family member or friend and 46% indicate that, if they need money, “The loan or credit will be your last alternative”.
In fact, the Argentine imagination is riddled with preconceptions regarding financial institutions. 54% believed that only a bank-connected person has access to credit. And three out of 10 do not feel prepared to decide whether a loan is right for them or not.
Added to the prejudices and fears is the uncertainty surrounding approval: Only 5 out of 10 Argentines believe that, if they apply for a loan, they could obtain it (53%)and the other half does not believe (14%) or does not know (33%) whether it would be approved or not.
However, “despite these barriers, those who have previously applied for a loan show a greater willingness to repeat the experience, mainly valuing payment conditions, interest rates and clarity of information“This ambivalence reflects a mix of fear and need, where credit is seen as both a tool for progress and a source of risk,” Mociulsky said.
For its part, Joaquin Dominguez, Ualá’s VP of Credit commented that “one of the reasons why at Ualá we emphasize financial education is because the lack of knowledge generates preconceptions about credit.”
Dominguez maintains that, Fear only imposes barriers when accessing these types of tools.which can be very valuable for everyday life, “whether to complete a personal project, undertake studies or start a business.”
The main reasons why users resort to credit
According to the research, once the barrier of imagination surrounding loans is broken, “the experience is usually positive: 7 out of 10 Argentines who requested credit in the past say they are interested in doing so in the future”.
The main reasons for requesting it are:
- Start or invest in a entrepreneurship (47%).
- Buy durable goods such as a car, a computer or a home (39%).
- Cover unexpected expenseshome improvements and/or moving(25%).
- Pay debts (22%).
“The perception that credit is inaccessible or risky highlights the urgent need for greater financial education and policies that foster more equitable and transparent access,” said Mociulsky. He added that “in a context where economic instability is the norm, breaking with these preconceptions is not only crucial for individuals, but also for the country’s sustained economic growth.”
As for the hard data from the report, It was reported that Ualá has granted more than 6.6 million loans in total so far, including personal loans of up to $7,500,000 with terms of 6, 12, 18 or 24 and 36 installmentsin addition to installment payments for purchases, recharges and bill payments.
According to Malaton, the average loan amount is currently $500,000 per user, while the average for quotas is $40,000Regarding the perception of credit, he highlighted some differences based on gender and previous experience.
“Women and people with less experience tend to be more cautious. Lower socioeconomic levels also have less financial education, which impacts their perception of credit. However, young people, although less experienced, show a great interest in acquiring financial knowledge,” she said.
Finally, he mentioned a very new fact: the UaláScorea system of scoring fintech’s own, based on artificial intelligence, which evaluates the credit profile of users based on their activity in the app. That is, the more transactions an individual executes, invests in and uses the app, the more possibilities they have of increasing the available amounts and improving the rates offered.
Source: Ambito
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