Moody's warns of credit risks for consumers and companies in Colombia

On August 9, 2026, Moody's Ratings warned that the return of higher interest rates could jeopardize the credit recovery in Colombia, even after a period of improvement in bank balances.

Bank credit recovery in Colombia

The agency's report highlights that the country is emerging from a negative credit cycle thanks to the cleaning up of institutions' balances and stricter criteria in granting new loans. However, the agency warns that high inflation and worsening fiscal accounts could again pressure interest rates, threatening to delay this improvement.

Impact of inflation and interest rates

Moody's projects inflation of 6% for 2026, above the 5.1% of 2025, and an interest rate of 12.3% in 2026, much higher than the 9.3% of the previous year. For 2027, inflation is expected to fall to 5.1% and the interest rate to 10.5%. Economic growth would remain around 2.5% both in 2026 and 2027. The tightening of monetary conditions hampers the sustainability of the recovery observed since 2025 and delays the normalization of corporate credit portfolios.

Concentration of corporate loans

The report notes that the concentration of corporate credit in the largest banks is increasing. The 20 biggest borrowers accounted for about 15% of portfolios at the end of 2025, versus 11% recorded five years earlier. The average of the three biggest banks, which concentrate about 51% of the country's total credit, highlights this trend.

Risks for consumers in Latin America

Moody's observes that the rapid expansion of consumer loans, especially unsecured ones, has pushed indebtedness beyond the repayment capacity of some borrowers in several countries in the region. In Argentina, delinquent household loans reached 12.1% in April, compared to 2.6% at the end of 2024. In Brazil, the debt service burden on household income rose to 28.3% in January 2026, up from 25.7% two years earlier.

Challenges for small and medium enterprises

The small and medium enterprise sector also faces pressures. In Brazil, problematic SME loans rose from 4.1% at the end of 2024 to 5.8% in May 2026. In Argentina, corporate delinquency increased from 0.7% at the end of 2024 to 3.3% in May, although the agency believes that lower rates could stabilize the situation in the coming quarters.

In summary, Moody's does not signal a regional banking crisis, but rather an increase in the risks that institutions will have to manage after years of credit expansion. For Colombia, the main risk lies in the combination of high inflation, elevated interest rates and fiscal pressures potentially prolonging the recovery path that was beginning to solidify.

With information from El Tiempo.