Only a third of Latin Americans consider it affordable to apply for a loan

Ualá presented a market research on the perceptions of the population in Latin America regarding credit, prepared in collaboration with Trendsity. According to the study, whose The sample consisted of more than 3,000 people at a regional level. 67% of the people surveyed in Argentina, Colombia and Mexico have requested a loan at some point, but only 36% consider it accessible in their country.

Read: Ualá maintains the rate of return on its account at 13% effective annual

The relationship with credit is marked by tensions and prejudices, especially in a challenging long-term economic-financial context in the region. In all three countries, high interest rates are the main barrier to access to credit (23%). The Top 3 is completed as follows:

Argentina – High interest rate (22%), instability in the country (17%) and fear of debt (13%). Colombia – High interest rate (22%), fear of debt (20%) and instability in the country (7%). Mexico – High interest rate (24%), fear of debt (20%) and I don’t know if I will be able to pay it off over time (11%).

There are various indicators that influence the perception of credit. According to the study, three out of 10 Latin Americans admit not feeling prepared to evaluate whether a loan is appropriate. Banking as a requirement, distrust of banks and fear of indebtedness are assumptions that challenge almost half of the interviewees.

57% of people consider it impossible to access credit without a bank account as a prerequisite (this preconception is higher in Colombia, with 60%).

43% consider applying for a loan as a last option if they need money. Likewise, 40% prefer to ask a family member or friend for money informally rather than turning to a financial institution.

For 55% of people, taking on debt is a problem. In Argentina, that percentage is 60%, compared to 50% in Colombia and 54% in Mexico. In addition to prejudices, fears and mistrust, there is also uncertainty about approval: 35% say they do not know if they would be approved for a loan if they applied for it and 13% firmly believe they would be rejected.

“One of the reasons why we at Ualá emphasize financial education is because a lack of knowledge creates preconceptions about credit. Fear only creates barriers when it comes to 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. We work to expand credit to more people and provide the possibility of creating a credit history, which contributes to the economic development of our country and the future vision of each person’s finances,” said Joaquín Domínguez, VP of Credit at Ualá.

Read: ‘We want Ualá to be a flexible financial ecosystem’

Entrepreneurship and consumption of goods, main reasons

Once the barrier of the imagination surrounding loans is broken, the experience is usually positive: eight out of 10 Latin Americans who have requested a loan in the past say they are interested in doing so in the future. As for the motivations for requesting a loan, the most chosen are:

– Start or invest in a business (50%).

– Buy durable goods such as a car, a computer or a home (39%).

– Cover unexpected expenses, home improvements and/or moving (25%).

– Pay debts (24%).

“The perception that credit is inaccessible or risky highlights the urgent need for greater financial education and policies that promote more equitable and transparent access,” said Mariela Mociulsky, CEO of Trendsity, based on the findings of the study.

“In a context where economic instability is the norm, breaking with these preconceptions is not only crucial for individuals, but also for the sustained economic growth of the country,” he added.

Uala

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When evaluating a loan, payment conditions, terms and amounts are the most relevant: 82% said that this is the first thing they would consider, followed by interest rates with 72%. Other important aspects are the ease of the process and clarity of the conditions (44%) and, finally, the requirements (24%). On the other hand, young people without a credit history put greater emphasis on the requirements to access the loan.

Regarding the sample profile of Trendsity, a regional market research consultancy, the firm conducted an online quantitative study in which 3,000 cases from Argentina, Colombia and Mexico were analysed, through a panel that followed ESOMAR standards. It included people between 16 and 65 years old with at least one bank account and/or virtual wallet.