Debt in Paraguay

Formal credit in Paraguay is available through banks, financieras, cooperatives, the Banco Nacional de Fomento (BNF), the Agencia Financiera de Desarrollo (AFD), the Crédito Agrícola de Habilitación (CAH) and registered Otorgantes de Crédito Dinerario (OCD), also called Casas de Crédito. Informal borrowing from family, friends or other private lenders remains widespread and may provide broader access, but legal protection and proof of the agreement vary. Eligibility for formal credit usually depends on income, documents, repayment history, employment or business form and guarantees. In 2024, 54.8% of adults aged 18 or older reported borrowing during the relevant period. Among borrowers, 58.5% used non-institutional sources and 39.4% used financial institutions. Only 25.3% could cover an unexpected expense without taking on new debt, while 57.9% could manage for one week to less than three months without additional financing. In 2025, banks, financieras and cooperatives held approximately USD 31.484 billion in credit. About 2.2 million people had at least one bank or finance-company credit, equivalent to approximately 46% of adults. Banks held 88.4% of the bank, finance-company and cooperative credit share, cooperatives 9.8% and financieras 1.9%. The Banco Central del Paraguay (BCP) supervises banks and financieras, while the Instituto Nacional de Cooperativismo (INCOOP) supervises cooperatives. The Secretaría de Defensa del Consumidor y el Usuario (SEDECO) handles general consumer protection. Credit contracts for sales or services should state the cash price, interest rate and amount, late-payment rate, commissions, fees, number and frequency of installments, total payable amount and rights after default. Prepayment allows a proportional reduction of interest that has not yet been earned, and abusive clauses are void. Credit-card law provides a seven-day withdrawal period, prohibits interest on interest and capitalization, does not allow a fixed late fee, limits penalties to reasonable and proportionate amounts, prohibits prepayment fees and requires 45 days' advance notice for contractual changes. Compensatory interest applies during the agreed credit period and moratory interest applies after default. Moratory interest cannot exceed the originally contracted rate, and moratory or punitive interest cannot be capitalized. Punitive interest cannot exceed 30% of the moratory rate. The BCP publishes a monthly effective usury ceiling; for September 2026, the maximum effective active rate was 27.39% in local currency and 11.31% in foreign currency. The applicable month, currency and product should be checked in a dispute. The BCP's Central de Riesgo Crediticio (CRC) consolidates bank and finance-company risk information. Since 23 March 2026, people can obtain the free online debt-status report through MITIC Identidad Electrónica, and from 1 May 2026 this is the sole access method. The report uses ratings from 1 to 6 and creditors provide the updates. The Buró de Información Crediticia (BIC) is authorized by the BCP and is subject to data-protection rules. People can request access, correction, updating, deletion, opposition and portability through a simple free procedure. If a creditor denies credit because of a report, it must notify the person and provide a copy of the report. Credit data may not be used for employment, promotion, dismissal or urgent medical access. After payment, the person generally pays the debt administrator or purchaser and requests an update from the reporting creditor; payment does not automatically erase every record without the source update. A cancellation notification must be made within 24 hours, and overdue debt that remains unclaimed without judicial action is not processed after three years under the applicable rules. Debt collection complaints in Paraguay commonly concern harassment, repeated calls, contacting family members, friends or employers and unsupported charges. SEDECO's Sistema Nacional Integrado de Protección al Consumidor (SNIPC) offers consultation, complaints, reports, information, mediation, conciliation and arbitration, with participating municipalities joining voluntarily. The BCP's Financial Consumer Office handles complaints about supervised bank and finance-company products. A complaint does not by itself suspend repayment obligations or a judicial enforcement case. A creditor can seek a juicio ejecutivo when an enforceable instrument exists. The court may order payment and attachment of assets; a judicial officer generally demands payment within three days and may then attach sufficient property. Real estate and other registrable assets can be subject to an annotation, and a remate may follow. Court costs can remain payable by the debtor even when the debt is paid immediately. Secured-credit enforcement and labor claims can receive special treatment. Under Ley de Quiebras, a commercial debtor facing insolvency can request convocatoria de acreedores or quiebra, and a non-merchant debtor can also file under Article 13. The filing may require the causes of insolvency, creditor list, amounts, dates, guarantees, assets, inventory and supporting records. The court resolution follows the statutory procedure, with a stated maximum of 25 days. After admission, earlier executive actions by creditors are generally barred, except for real security and labor credits. A síndico supervises the debtor's administration until a concordato is approved. Paraguay has no evidenced separate consumer-insolvency and discharge procedure; private refinancing remains a negotiated agreement rather than an automatic legal entitlement. A sound recovery process starts by listing every creditor, principal, accrued interest, fees, guarantee, due date and payment already made. Obtain CRC and BIC reports, challenge unsupported balances or incorrect data, request a written balance and payment allocation, negotiate any settlement or installment plan in writing, keep receipts and request reporting updates after payment. Taking new high-cost credit to service old debt can increase the total burden. Public debt is a separate macroeconomic layer: the Ministry of Economy and Finance (MEF) is responsible for public credit and debt, which should not be confused with personal or small-business debt.