Mercado Libre Loan Defaults in Argentina Hit 8.7% by Late 2025: JP Morgan Report

Loan delinquencies in Argentina’s fintech sector surged in 2025, with MercadoLibre’s credit portfolio showing a sharp deterioration, according to a report by JPMorgan. The proportion of loans overdue by more than 90 days reached 8.7% in December 2025, a fivefold increase from 1.8% a year earlier, reflecting broader financial stress in the country.

Rising Defaults in a Slowing Credit Market

The increase in non-performing loans coincides with a slowdown in MercadoLibre’s lending growth. JPMorgan noted that the company reduced its expansion pace in May 2025, which naturally led to a higher share of delinquent loans within its portfolio. When measured against the loan balance from three months prior, delinquency rates climbed from 3.3% in December 2024 to 10.1% in December 2025.

“Given that MELI slowed its growth in May 2025, this naturally causes delinquency to represent a larger portion of the portfolio,”

JPMorgan

The report highlights that while Argentina’s delinquency rates remain below those in Brazil, where defaults stood at 11% in December 2025 (down from 15.9% a year earlier), the rapid deterioration in Argentina signals growing credit risk. The trend mirrors broader challenges in the country’s financial system, where rising interest rates and economic instability have strained borrowers.

Argentina’s Smaller but Growing Credit Exposure

Despite the rise in defaults, Argentina represents a relatively small portion of MercadoLibre’s total credit exposure. As of December 2025, the company’s loan book in the country stood at approximately $1.1 billion, compared with $3.6 billion in Mexico and $7.9 billion in Brazil. However, Mercado Pago, MercadoLibre’s fintech arm, had expanded its reach to 6.3 million credit customers in Argentina by January 2026—roughly 14% of the population.

These users held a combined 21 million outstanding loans, averaging 3.3 loans per customer. Of those, around 205,000 were issued to small and medium-sized enterprises (SMEs), while the remainder went to individual borrowers. The data underscores MercadoLibre’s role in expanding credit access in Argentina, even as economic conditions weigh on repayment rates.

Regional Contrasts in Credit Performance

The JPMorgan report contrasts Argentina’s rising delinquencies with more stable trends in other markets. While Argentina saw annual interest rates climb in the fourth quarter of 2025, Mexico and Brazil experienced declines, contributing to better credit performance. Brazil’s delinquency rate, though still higher than Argentina’s, improved from 15.9% to 11% over the same period.

Analysts surveyed by Bloomberg set a price target of $2,515 for MercadoLibre by April 2027, up from its current level of $1,855. The projection reflects long-term confidence in the company’s regional dominance, despite short-term credit challenges in Argentina.

Broader Financial System Under Strain

The surge in MercadoLibre’s loan defaults aligns with a broader increase in delinquencies across Argentina’s financial sector. Lawmakers have taken notice, with 18 legislative proposals introduced in Congress to address rising defaults linked to financial institutions and digital wallets. The measures aim to mitigate risks for both lenders and borrowers amid an increasingly fragile economic environment.

For MercadoLibre, the slowdown in credit growth and rising defaults in Argentina pose challenges to future profitability. However, the company’s diversified operations across Latin America—particularly in Brazil and Mexico—provide a buffer against localized financial instability. As economic conditions evolve, the performance of its credit portfolio in Argentina will remain a key indicator of regional credit health.