The number of checks rejected due to insufficient funds in the first two months of 2026 reached levels similar to those seen during the Covid-19 pandemic, warns a report by the credit risk analysis center Fidelitas.
The study shows that in December the number of rejected checks reached 97,612, a record high. In January the figure was 89,352 and in February 86,350, numbers well above the historical average.
According to the report, these figures “even exceed the pandemic levels of 2020.”
The study adds that “the ratio of issued to rejected checks is growing astronomically, as paper checks are becoming a less common payment method over time, but remain very prevalent among SMEs (Small and Medium-sized Enterprises).”
“Measured in dollars, the economic impact is equally significant and concerning. In December 2025, the amount rejected totaled US$198.8 million; in January and February 2026, the figures were US$175.7 million and US$172.8 million, respectively,” the report states.
Fidelitas warns that “the persistence of these levels in the first months of 2026 suggests that the pressure on companies’ working capital remains high.”
“While the average had remained below US$30 million per month, in the last quarter it increased sixfold, exceeding US$180 million,” it added.
Business defaults: critical sectors
The study details that the percentage of businesses defaulting (i.e. not paying) on loans is between 2.5% and 2.7% on average per month. However, it should be noted that large companies account for 42% of financing.
If only SMEs are considered, loan repayment delays have risen to 4.4%.
According to a report by the Economic Studies Center of Banco Provincia, the irregular repayment of their loan portfolio has jumped from 1.5% of the total at the end of 2024 to 5.5% at the end of 2025.
While defaults exceed 9% of total loans to households, 2.5% of the corporate loan portfolio is in default.
As reported by Ámbito, in January 2026, one in eight companies that took out a loan was in default (12.5%), but payment irregularity reached 10% in 75% of the smallest loans (those up to $45 million).
Risk of Supply Chain Disruption
According to Fidelitas, default rates in the milling sector have reached 43.3%; in leather, 40.7%; in furniture, 7.9%; in apparel, 7.7%; and in construction, 6.1%.
“These levels are not solely a problem of individual solvency. The SMEs in these sectors are, for the most part, suppliers of inputs or subcontractors for large industrial companies,” the report states.
It also warns that “when a key supplier in the chain fails — whether due to bankruptcy, operational disruption, or inability to deliver orders — the impact ripples upstream, causing production delays, stockouts, and operational disruptions in larger companies.”
“This is a supply chain risk that transcends the Argentine context and is consistent with the dynamics observed in other emerging economies under pressure,” the report concludes.
This story was originally published in Ámbito
Facts Only
Actor: Fidelitas (credit risk analysis center)
Event: Report released detailing increased number of check rejections due to insufficient funds in 2026, exceeding pandemic levels of 2020
Timeline: First two months of 2026
Locations: Not specified
Date: Not specified
Amount rejected (December): US$198.8 million
Amount rejected (January): US$175.7 million
Amount rejected (February): US$172.8 million
Ratio of issued to rejected checks increasing significantly
Percentage of businesses defaulting: 2.5% - 2.7% on average per month (large companies account for 42%)
Loan repayment delays for SMEs: 4.4%
Default rates in milling sector: 43.3%; in leather: 40.7%; in furniture: 7.9%; in apparel: 7.7%; in construction: 6.1%
Executive Summary
In the first two months of 2026, the number of check rejections due to insufficient funds reached levels akin to those seen during the Covid-19 pandemic, as per a report by Fidelitas. The study reveals that in December, 97,612 checks were rejected, a record high. This figure decreased slightly in January and February to 89,352 and 86,350 respectively, numbers significantly above the historical average. These figures surpass even those of 2020's pandemic levels. The report also notes an increasing ratio of issued to rejected checks, as paper checks remain prevalent among Small and Medium-sized Enterprises (SMEs).
The economic impact is substantial, with December's rejected amount totaling US$198.8 million; in January and February 2026, the figures were US$175.7 million and US$172.8 million respectively. Fidelitas warns that these levels persisting in the first months of 2026 indicate ongoing pressure on companies' working capital.
Business defaults, particularly among SMEs, have risen significantly. Loan repayment delays for SMEs have reached 4.4%, while defaults exceed 9% of total loans to households and 2.5% of the corporate loan portfolio is in default. Default rates are notably high in certain sectors such as milling, leather, furniture, apparel, and construction, with these issues not solely a problem of individual solvency but also a risk for supply chain disruptions affecting larger companies.
Full Take
Steelman: The report by Fidelitas highlights an alarming increase in check rejections due to insufficient funds, reaching levels similar to those during the Covid-19 pandemic. This trend is particularly pronounced among SMEs and certain sectors like milling, leather, furniture, apparel, and construction. Default rates are high, with loan repayment delays for SMEs reaching 4.4%.
Patterns detected: ARC-0024 Ambiguity (The article does not clarify the causes behind these trends, leaving room for interpretation).
Root Cause: The root cause may be related to economic instability, potential liquidity issues within companies, and a shift in payment habits. Factors such as inflation, interest rates, and regulatory changes could also play a role.
Implications: These trends pose significant challenges for both the affected businesses and the broader economy. Defaults among SMEs can lead to supply chain disruptions for larger companies, causing production delays, stockouts, and operational disruptions. Unpaid loans may hinder economic growth and investment.
Bridge Questions: What factors are contributing to this trend of increased check rejections? How can the government and financial institutions address these issues to support businesses and maintain economic stability? What long-term effects could these trends have on the Argentine economy and its SME sector?
Sentinel — Human
While the text shows some signs of being written by a human, it's important to note that these indicators can be present in formulaic journalism as well. This analysis suggests the article is likely human-written, but further examination may be needed for certainty.