Note: The data are provided for informational purposes only and in some cases, the information may be incomplete, not fully accurate or out of date. For more information on how data are compiled, see "A Note About Sources." The date of the last update for each country is marked in the section "Country Indicators." We welcome updates and comments. Click here to write to us.
Bolivia
Country Indicators
Information Last Updated
6/1/2006
Information Compiled by
Jeremiah Grossman, IRIS Center
Population (Millions)
9.2 [2005]
Population Density (per sq km)
8 [2005]
GNI per capita (US$)
1010 [2005]
GNI per capita (PPP US$)
2740 [2005]
Total Unemployment (% of labor force)
6 [2002]
Employment in Agriculture (% of total employment)
5 [2000]
Gross domestic saving (% of GDP)
10 [2002]
% Population under $2/day (PPP)
43 [2002]
Depth of Financial Sector (M2/GDP)
39 [2005]
Exchange rate
1 USD : 8 BOB, as of May 12, 2006.
Percentage of population with access to banking services
Urban poor have close to 100% access; rural poor do not. Overall, about 50% of economically-active informal sector has access (Loubière et al., 2004)(NABARD,2001)
Ownership structure of banks (and financial institutions if available)
Banks and FIs are privately owned, as Bolivia eliminated public-sector banking in the mid-1980s. There are 3 foreign banks (Loubière et al., 2004) (Meagher et al., 2006).
Formal and Semi-Formal Sources of Microfinance
Commercial Banks; Private Financial Funds; Open cooperatives; Mutual benefit savings and home loan societies (Meagher et al., 2006).
1. FONDESIF: GTZ-supported government-run apex organization providing loans and technical assistance to regulated and unregulated MFIs. 2. NAFIBO: Apex development bank providing low-cost long-term loans to regulated MFIs. 3. Funda-Pro: USAID-supported private non-profit apex providing funding for loans and capacity building to regulated and unregulated MFIs (Apex Organizations, Navajas & Schreiner) (NABARD,2001).
Definitions of microfinance or microcredit
Microcredit: A loan to a borrower (individual, business, or group of borrowers) to finance small-scale production, trade, or provision of services, and where the assessment of repayment capacity of the borrower is based on revenues generated by these activities (Loubière et al., 2004).
NGO microfinance provider formalization or transformation issues
Some NGOs have created (or transformed into) Private Financial Funds (Fondos Financieros Privados (FFPs)), which were created in 1995 to encourage NGOs with strong lending operations to transform into FFPs, which would allow them to take deposits, more easily access wholesale funds and commercial capital, and encourage more efficient management (Meagher et al., 2006).
Ongoing microfinance policy development status
As of June 2006, the new government has allotted US$ 30 million for onlending to micro- and small-scale producers at below-market rates of 4% per annum (Cheap Credit, Los Tiempos (Spanish)).
Safety net availability: insurance, pension, etc.
Old-age, disability, and survivor pensions; mandatory individual retirement accounts; health and maternity insurance; work injury benefits; severance pay for dismissed workers; family allowance benefits (Social Security, SSA).
Authorized financial entity devoted to financial intermediation and the provision of financial services to the public (Law on Banks, Art. 1).
Superintendent of Banks and Financial Entities (Superintendencia de Bancos y Entidades Financieras (SBEF)). SBEF is responsible for authorization of operations, supervision, control, and inspection of banks (Law on Banks, Art. 4, 154).
Least-restricted financial activities and highest minimum capital requirements.
Non-banking financial entities, whose principal objective is channeling resources to micro- and small-scale borrowers in urban and rural areas, and which are authorized to carry out financial intermediation operations and provide financial services to the public nationwide (Supreme Decree No. 24,000, Art. 1) (Law on Banks, Art. 1).
Superintendent of Banks and Financial Entities (Superintendencia de Bancos y Entidades Financieras (SBEF)). Regulator authorizes operation, supervises, controls, and inspects NBFI activities (Law on Banks, Art. 4, 6).
For-profit financial services targeted at micro- and small-scale borrowers, with lower minimum capital requirements than for commercial banks.
NBFIs set up as non-profit civil associations, which are authorized to carry out financial intermediation operations and provide financial services to the public nationwide (Law on Banks, Art. 1).
Superintendent of Banks and Financial Entities (Superintendencia de Bancos y Entidades Financieras (SBEF)). Regulator authorizes operation, supervises, controls, and inspects NBFI activities (Law on Banks, Art. 4, 6).
Licensed financial services provided by a non-profit institution.
Limited liability NBFIs set up as cooperative societies, which are authorized to carry out financial intermediation operations and provide financial services to the public nationwide (Law on Banks, Art. 1, 70).
Superintendent of Banks and Financial Entities (Superintendencia de Bancos y Entidades Financieras (SBEF)). Regulator authorizes operation, supervises, controls, and inspects NBFI activities. National Institute of Cooperatives also monitors open cooperatives (Law on Banks, Art. 4, 6) (WOCCU, 2005).
Licensed financial services provided by a cooperative society.
Supplemental liability credit and savings unions that only perform financial operations for their members, lack a financial operating license, and are not regulated by the SBEF (Law on Banks, Art. 70) (Supreme Decree No. 24,439, Art. 28).
National Institute of Cooperatives (Instituto Nacional de Cooperativas (INALCO)). INALCO is responsible for authorization to operate and supervision of closed cooperatives (WOCCU, 2005).
Unlicensed member-only financial services provided by a cooperative society.
Not-for-profit private institutions or juridical persons, whether domestic or foreign, religious or secular, which undertake development- or aid-oriented activities using government or external funding (Decreto Supremo No. 22409 (Spanish) ).
NGOs are not directly regulated.
Unlicensed financial services provided by a non-profit institution.
Ownership of 5% or more of a bank by one shareholder (directly or indirectly) requires SBEF authorization. Founders may not transfer their shares for the first three years without SBEF authorization (Law on Banks, Art. 24).
Time: Decision on approval to incorporate as a bank must be made by the Superintendent within 60 days (Law on Banks, Art. 14). In addition, the World Bank estimates the following for businesses in Bolivia: Starting a Business: 50 days, approx. US$1,500. Acquiring all Necessary Licenses: 187 days, approx. US$2,600 (Doing Business, World Bank).
Time: Decision on approval to incorporate as a bank must be made by the Superintendent within 60 days (Law on Banks, Art. 14). In addition, the World Bank estimates the following for businesses in Bolivia: Starting a Business: 50 days, approx. US$1,500. Acquiring all Necessary Licenses: 187 days, approx. US$2,600 (Doing Business, World Bank).
Vice Minister of Public Investment and External Financing (Viceministro de Inversión Pública y Financiamiento Externo) administers the National Register of Nongovernmental Organizations (Registro Nacional de Organizaciones no Gubernamentales) (Decreto Supremo No. 26,973 (Spanish)).
Founders: Minimum 5 natural and/or juridical persons. Founders may not: be indicted or serving time for a common crime; be prohibited from engaging in commerce (see Art. 19 of Bolivian Code of Commerce) or opening a checking account; be a debtor in arrears; have been found guilty of financial crimes; have bankrupted a corporation or financial institution; be a government employee or a Director or administrator of a government financial institution. Directors: Min. 5, max. 10. Restrictions are same as for founders, plus those contained in Art. 310 of the Bolivian Code of Commerce and Art. 32 of the Law on Banks and Financial Institutions, which include recent finance-related government employment, kinship, and other conflicts of interest. Supervisors, Managers, Legal Representatives: Cannot act as Director of any other public company, association, or cooperative (except subsidiaries) (Law on Banks
, Art. 10-11, 30, 32, 34) (Code of Commerce, Art. 19, 310, 329 (Spanish)).
Economic and financial feasibility studies required (Law on Banks, Art. 11)
All founders must submit: tax payment records and personal financial statements. Natural (individual) founders must submit: certificate of criminal record; profession, nationality, and other identifying information. Juridical (company) founders must submit: public incorporation documents; registration in National Trade Registry; annual report; audited balance sheet; list of Board members; list of shareholders. Founders must also submit a list of administrators with their professions and related work experience (Law on Banks, Art. 11).
Non-bank Financial Institutions
Private Financial Funds
Founders: Minimum 5 natural and/or juridical persons. Founders may not: be indicted or serving time for a common crime; be prohibited from engaging in commerce (see Art. 19 of Bolivian Code of Commerce) or opening a checking account; be a debtor in arrears; have been found guilty of financial crimes; have bankrupted a corporation or financial institution; be a government employee or a Director or administrator of a government financial institution. Directors: Min. 5, max. 10. Restrictions are same as for founders, plus those contained in Art. 310 of the Bolivian Code of Commerce and Art. 32 of the Law on Banks and Financial Institutions, which include recent finance-related government employment, kinship, and other conflicts of interest. Supervisors, Managers, Legal Representatives: Cannot act as Director of any other public company, association, or cooperative (except subsidiaries) (Law on Banks
, Art. 10-11, 30, 32, 34) (Code of Commerce, Art. 19, 310, 329 (Spanish)).
Must submit verifiable evidence to SBEF that the FFP has recruited qualified professionals experienced in savings mobilization and small-value lending (Supreme Decree No. 24,000).
All founders must submit: tax payment records and personal financial statements. Natural (individual) founders must submit: certificate of criminal record; profession, nationality, and other identifying information. Juridical (company) founders must submit: public incorporation documents; registration in National Trade Registry; annual report; audited balance sheet; list of Board members; list of shareholders. Founders must also submit a list of administrators with their professions and related work experience (Law on Banks, Art. 11).
Company shares or similar securities as credit guarantees (Law on Banks, Art. 79).
Mutual Benefit Savings and Home Loan Societies
Founders: Minimum 5 natural and/or juridical persons. Founders may not: be indicted or serving time for a common crime; be prohibited from engaging in commerce (see Art. 19 of Bolivian Code of Commerce) or opening a checking account; be a debtor in arrears; have been found guilty of financial crimes; have bankrupted a corporation or financial institution; be a government employee or a Director or administrator of a government financial institution. Directors: Min. 5, max. 10. Restrictions are same as for founders, plus those contained in Art. 310 of the Bolivian Code of Commerce and Art. 32 of the Law on Banks and Financial Institutions, which include recent finance-related government employment, kinship, and other conflicts of interest. Supervisors, Managers, Legal Representatives: Cannot act as Director of any other public company, association, or cooperative (except subsidiaries) (Law on Banks
, Art. 10-11, 30, 32, 34) (Code of Commerce, Art. 19, 310, 329 (Spanish)).
All founders must submit: tax payment records and personal financial statements. Natural (individual) founders must submit: certificate of criminal record; profession, nationality, and other identifying information. Juridical (company) founders must submit: public incorporation documents; registration in National Trade Registry; annual report; audited balance sheet; list of Board members; list of shareholders. Founders must also submit a list of administrators with their professions and related work experience (Law on Banks, Art. 11).
Cooperatives/Credit Unions
Open Cooperatives
Founders: Minimum 5 natural and/or juridical persons. Founders may not: be indicted or serving time for a common crime; be prohibited from engaging in commerce (see Art. 19 of Bolivian Code of Commerce) or opening a checking account; be a debtor in arrears; have been found guilty of financial crimes; have bankrupted a corporation or financial institution; be a government employee or a Director or administrator of a government financial institution. Directors: Min. 5, max. 10. Restrictions are same as for founders, plus those contained in Art. 310 of the Bolivian Code of Commerce and Art. 32 of the Law on Banks and Financial Institutions, which include recent finance-related government employment, kinship, and other conflicts of interest. Supervisors, Managers, Legal Representatives: Cannot act as Director of any other public company, association, or cooperative (except subsidiaries). Owners: Min. 10 members (Law on Banks
, Art. 10-11, 30, 32, 34) (Code of Commerce, Art. 19, 310, 329 (Spanish)) (General Law for Cooperative Societies, Art. 57 (Spanish)).
All founders must submit: tax payment records and personal financial statements. Natural (individual) founders must submit: certificate of criminal record; profession, nationality, and other identifying information. The SBEF will also consider founders' solvency and fitness for financial activities . Juridical (company) founders must submit: public incorporation documents; registration in National Trade Registry; annual report; audited balance sheet; list of Board members; list of shareholders. Founders must also submit a list of administrators with their professions and related work experience (Law on Banks, Art. 11) (Supreme Decree No. 24,439, Art. 4).
Company shares or similar securities as credit guarantees (Law on Banks, Art. 79).
Closed Cooperatives
Owners: Min. 10 members. Owners must be 18 or older (certain exceptions apply) and not be a member of another cooperative of the same type. Directors: Must have 3, 5, or 7 Directors and 3 on the Supervisory Committee (General Law for Cooperative Societies, Art. 57, 66 (Spanish)) (WOCCU, 2005).
Must submit copy of approved Supreme Resolution and bylaws; information on objectives, sector, area of activity, target population, methodology, expected results, and evaluation methods (NGO Registration Requirements, VIPFE (Spanish)).
Tier I (Primary) Capital: Paid-in capital; legal reserves; irrevocable contributions with pending capitalization; other non-distributable reserves. Tier II (Secondary) Capital (no more than 100% of Tier I capital): Subordinated debts (with maturity over 5 years, and only up to 50% of Tier I capital); voluntary generic provisions to cover future currently-unidentified losses (up to 2% of assets) (Law on Banks, Art. 48).
0%: Cash, deposits with Banco Central de Bolivia (BCB) and investments in securities issued by BCB/Treasury, credits from central banks of other countries, prepaid contingent credits, credits guaranteed with cash deposits in bank itself. 10%: Credits guaranteed by the Treasury 20%: Credits guaranteed by banks rated first-class and credits granted by the financial entity to these banks and those cash items on collection 50%: Housing mortgage loans, exclusively for acquisition, construction, remodeling and improvement of occupied/rented house 100%: All other assets, operations and services that represent a risk, or any type of financial liability (Law on Banks, Art. 47).
Loans under US$ 2,000 exempted from 100% provisioning requirement for unsecured loans. However, if a microfinance client is financed by more than one FI at the same time, both FIs must provision their loans at 100%. Bolivia has activity-specific (not institution-specific) provisioning requirements for microfinance lending: Class A - Normal (1-5 days overdue): 1%. Class B - Potential Problems (6-30 days overdue): 5%. Class D - Doubtful (31-60 days overdue or rescheduled twice): 20%. Class F - Doubtful (61-90 days overdue): 50%. Class H - Lost (Over 90 days overdue): 100% (Loubière et al., 2004) (NABARD,2001) (ASOFIN,2006).
Minimum Reserve Requirement: 12% of total liabilities (2% in cash, 10% in approved securities). Legal Reserve Fund: Must deposit min. 10% of annual profit until fund reaches 50% of paid-in stock (NABARD,2001) (Law on Banks, Art. 26).
Tier I (Primary) Capital: Paid-in capital; legal reserves; irrevocable contributions with pending capitalization; other non-distributable reserves. Tier II (Secondary) Capital (no more than 100% of Tier I capital): Subordinated debts (with maturity over 5 years, and only up to 50% of Tier I capital); voluntary generic provisions to cover future currently-unidentified losses (up to 2% of assets) (Law on Banks, Art. 48).
0%: Cash, deposits with Banco Central de Bolivia [www.bcb.gov.bo/] (BCB) and investments in securities issued by BCB/Treasury, credits from central banks of other countries, prepaid contingent credits, credits guaranteed with cash deposits in bank itself. 10%: Credits guaranteed by the Treasury 20%: Credits guaranteed by banks rated first-class and credits granted by the financial entity to these banks and those cash items on collection 50%: Housing mortgage loans, exclusively for acquisition, construction, remodeling and improvement of occupied/rented house 100%: All other assets, operations and services that represent a risk, or any type of financial liability (Law on Banks, Art. 47).
Loans under US$ 2,000 exempted from 100% provisioning requirement for unsecured loans. However, if a microfinance client is financed by more than one FI at the same time, both FIs must provision their loans at 100%. Bolivia has activity-specific (not institution-specific) provisioning requirements for microfinance lending: Class A - Normal (1-5 days overdue): 1%. Class B - Potential Problems (6-30 days overdue): 5%. Class D - Doubtful (31-60 days overdue or rescheduled twice): 20%. Class F - Doubtful (61-90 days overdue): 50%. Class H - Lost (Over 90 days overdue): 100% (Loubière et al., 2004) (NABARD,2001) (ASOFIN,2006).
Minimum Reserve Requirement: 12% of total liabilities (2% in cash, 10% in approved securities) (NABARD,2001).
Mutual Benefit Savings and Home Loan Societies
Approx. US$450,000 (300,000 Special Drawing Rights) (based on exchange rate of 1 SDR = approx. US$1.5 as of May 2006) (Law on Banks, Art. 75) (SDR Valuation, IMF).
Tier I (Primary) Capital: Paid-in capital; legal reserves; irrevocable contributions with pending capitalization; other non-distributable reserves. Tier II (Secondary) Capital (no more than 100% of Tier I capital): Subordinated debts (with maturity over 5 years, and only up to 50% of Tier I capital); voluntary generic provisions to cover future currently-unidentified losses (up to 2% of assets) (Law on Banks, Art. 48).
0%: Cash, deposits with Banco Central de Bolivia (BCB) and investments in securities issued by BCB/Treasury, credits from central banks of other countries, prepaid contingent credits, credits guaranteed with cash deposits in bank itself. 10%: Credits guaranteed by the Treasury 20%: Credits guaranteed by banks rated first-class and credits granted by the financial entity to these banks and those cash items on collection 50%: Housing mortgage loans, exclusively for acquisition, construction, remodeling and improvement of occupied/rented house 100%: All other assets, operations and services that represent a risk, or any type of financial liability (Law on Banks, Art. 47).
Loans under US$ 2,000 exempted from 100% provisioning requirement for unsecured loans. However, if a microfinance client is financed by more than one FI at the same time, both FIs must provision their loans at 100%. Bolivia has activity-specific (not institution-specific) provisioning requirements for microfinance lending: Class A - Normal (1-5 days overdue): 1%. Class B - Potential Problems (6-30 days overdue): 5%. Class D - Doubtful (31-60 days overdue or rescheduled twice): 20%. Class F - Doubtful (61-90 days overdue): 50%. Class H - Lost (Over 90 days overdue): 100% (Loubière et al., 2004) (NABARD,2001) (ASOFIN,2006).
Minimum Reserve Requirement: 12% of total liabilities (2% in cash, 10% in approved securities) (NABARD,2001).
Cooperatives/Credit Unions
Open Cooperatives
Category 1: Approx. US$225,000 (150,000 Special Drawing Rights (SDRs). Category 2: Approx. US$375,000 (250,000 SDRs) Category 3: Approx. US$945,000 (630,000 SDRs) Category 4: Approx. US$8.25 million (5.5 million SDRs) (based on exchange rate of 1 SDR = approx. US$1.5 as of May 2006) (Supreme Decree No. 24,439, Art. 5) (SDR Valuation, IMF).
Tier I (Primary) Capital: Contributions from union members; reserve fund consisting of balance sheet surplus; voluntary donations (Law on Banks, Art. 72).
0%: Cash, deposits with Banco Central de Bolivia [www.bcb.gov.bo/] (BCB) and investments in securities issued by BCB/Treasury, credits from central banks of other countries, prepaid contingent credits, credits guaranteed with cash deposits in bank itself. 10%: Credits guaranteed by the Treasury 20%: Credits guaranteed by banks rated first-class and credits granted by the financial entity to these banks and those cash items on collection 50%: Housing mortgage loans, exclusively for acquisition, construction, remodeling and improvement of occupied/rented house 100%: All other assets, operations and services that represent a risk, or any type of financial liability (Law on Banks, Art. 47).
Loans under US$ 2,000 exempted from 100% provisioning requirement for unsecured loans. However, if a microfinance client is financed by more than one FI at the same time, both FIs must provision their loans at 100%. Bolivia has activity-specific (not institution-specific) provisioning requirements for microfinance lending: Class A - Normal (1-5 days overdue): 1%. Class B - Potential Problems (6-30 days overdue): 5%. Class D - Doubtful (31-60 days overdue or rescheduled twice): 20%. Class F - Doubtful (61-90 days overdue): 50%. Class H - Lost (Over 90 days overdue): 100% (Loubière et al., 2004) (NABARD,2001) (ASOFIN,2006 ).
Minimum Reserve Requirement: 12% of total liabilities (2% in cash, 10% in approved securities) (NABARD,2001).
Closed Cooperatives
None, unless they have over 10,000 members, in which case they must follow the requirements for Open Cooperatives (Supreme Decree No. 24,439, Art. 30) (WOCCU, 2005).
Permitted: All financial services, including: asset-, liability-, and contingent-based operations; and operations in foreign currency. Prohibited: Using bank's own stock or assets as guarantee (except for BCB-granted lines of credit); extending credit in order to facilitate purchase of bank's own stock; posting bonds or guaranteeing payments for third-party debt obligations; acting as partner or shareholder of non-financial companies (Law on Banks, Art. 35-39, 54)
No restrictions on lending or deposit rates. BCB publishes FIs' effective annual interest rates weekly (Law on Banks, Art. 42).
Lending per Borrower or Group of Related Borrowers: Max. 20% if secured, 5% otherwise. Lending (Total): Max. 200% of equity, under certain circumstances. Borrowing from other FIs: Max. 100% of bank's net worth (up to 200% with SBEF authorization). Investment Abroad: Max. 40% of bank's net worth. Investments in Fixed Assets, Bank's Own Agencies/Branches, & Shares of Certain Financial Companies: Max. 100% of bank's net worth. (Law on Banks, Art. 43-45, 52-53).
No lending to "related" parties. Related parties include: owners (directly or indirectly) of over 10% of the FI's capital; people and entities with administrative, executive, supervisory, or permanent consulting roles in the FI; improperly identified parties; those receiving loans that cannot be justified by the stated business purpose or adequately guaranteed; other entities, based on "reasonable and sufficient evidence" of such a relationship. FI MAY make small loans to non-executive employees (up to 0.15% of net worth per employee, max. 1.5% of net worth total) (Law on Banks, Art. 50, 54).
Non-bank Financial Institutions
Private Financial Funds
Permitted: Asset- and liability-based transactions (deposits, loans, etc.), with certain exceptions (see below). Must demonstrate ability to handle corporate time and demand deposits before accepting deposits from general public. Opening checking accounts, issuing credit cards, and investing the capital of financial services entities require SBEF authorization. Prohibited: Deposit services for general deposit warehouses; factoring; receiving bills of exchange, making collections or payments or transfers, performing wire transfers, or issuing payment orders (all with respect to foreign trade operations only); investing in securitization companies or insurance companies; administering mutual funds as investments for third parties. (Law on Banks, Art. 76) (NABARD,2001).
May not use the word "bank" in its name; must add F.F.P. to end of name. SBEF may impose whatever operating restrictions it deems to be prudent. (Supreme Decree No. 24,000)
No restrictions on lending or deposit rates. BCB publishes FIs' effective annual interest rates weekly (Law on Banks, Art. 42).
Max. Credit to Individual Borrower or Borrowing Group: 3% of equity (secured), 1% (with personal guarantee). Exception for housing credits (max. 5%, 10% with SBEF authorization). Max. Credit to licensed FI: 20% of net worth, except with SBEF authorization. Max. Credit (Total): 200% of equity, under certain circumstances. Max. Deposit Mobilization: Up to 10 times equity (Law on Banks, Art. 45, 79) (NABARD,2001).
No lending to Directors, executive staff, employees, or "related" parties. Related parties include: owners (directly or indirectly) of over 10% of the FI's capital; people and entities with administrative, executive, supervisory, or permanent consulting roles in the FI; improperly identified parties; those receiving loans that cannot be justified by the stated business purpose or adequately guaranteed; other entities, based on "reasonable and sufficient evidence" of such a relationship. FI MAY make small loans to non-executive employees (up to 0.15% of net worth per employee, max. 1.5% of net worth total) (Law on Banks, Art. 50, 54).
Mutual Benefit Savings and Home Loan Societies
Permitted: Asset- and liability-based transactions (deposits, loans, etc.), with certain exceptions (see below). Checking accounts and credit cards require SBEF authorization. Prohibited: Transactions related to: issuing and using traveler's checks; performing future contracts for resale of foreign currency; foreign wire transfers and money orders; investing in securitization companies; performing repurchase and factoring operations; investing in Second-Tier Banks, financial services companies, insurance companies, or pension fund administrators; and administering mutual funds to invest for third parties. (Law on Banks, Art. 74).
No restrictions on lending or deposit rates. BCB publishes FIs' effective annual interest rates weekly (Law on Banks, Art. 42).
Max. Credit to Individual Borrower or Borrowing Group: 3% of equity (secured), 1% (with personal guarantee). Exception for housing credits (max. 5%, 10% with SBEF authorization). Max. Credit to licensed FI: 20% of net worth, except with SBEF authorization. Max. Credit (Total): 200% of equity, under certain circumstances (Law on Banks, Art. 45, 79).
No lending to Directors, executive staff, employees, or "related" parties. Related parties include: owners (directly or indirectly) of over 10% of the FI's capital; people and entities with administrative, executive, supervisory, or permanent consulting roles in the FI; improperly identified parties; those receiving loans that cannot be justified by the stated business purpose or adequately guaranteed; other entities, based on "reasonable and sufficient evidence" of such a relationship. FI MAY make small loans to non-executive employees (up to 0.15% of net worth per employee, max. 1.5% of net worth total) (Law on Banks, Art. 50, 54).
Cooperatives/Credit Unions
Open Cooperatives
Permitted for all Categories: Asset- and liability-based transactions (deposits, loans, etc.), with certain exceptions (see below). Asset-based transactions limited to associates. Checking accounts require SBEF authorization. Permitted (Categories 1 and 2): Savings and term deposits; borrowing from domestic financial institutions; granting secured or unsecured loans; issuing domestic drafts and payment orders; foreign exchange for their own operations; investing in CDs or government bonds; acquiring title to or collecting immovable goods or personal property as security. Permitted (Category 3): All transactions permitted by FFPs, except for financial leasing. Permitted (Category 4): All asset- and liability-based transactions except those listed below. Prohibited for all Categories: Deposit services for general deposit warehouses; issuing traveler's checks or credit cards; financial leasing and factoring; valuating financial institutions; performing future contracts for resale of foreign currency; foreign letter of credit, wire transfer, or payment order-related activities; investing in securitization companies; repurchases; investing in Second-Tier Banks, financial services companies, insurance companies, or pension fund administrators; and administering mutual funds to invest for third parties (Law on Banks, Art. 71) (Supreme Decree No. 24,439, Art. 5-6).
No restrictions on lending or deposit rates. BCB publishes FIs' effective annual interest rates weekly (Law on Banks, Art. 42).
Max. Credit to Individual Borrower or Borrowing Group: 3% of equity (secured), 1% (with personal guarantee). Exception for housing credits (max. 5%, 10% with SBEF authorization). Max. Credit to licensed FI: 20% of net worth, except with SBEF authorization. Max. Credit (Total): 200% of equity, under certain circumstances (Law on Banks, Art. 45, 79).
No lending to Directors, executive staff, employees, or "related" parties. Related parties include: owners (directly or indirectly) of over 10% of the FI's capital; people and entities with administrative, executive, supervisory, or permanent consulting roles in the FI; improperly identified parties; those receiving loans that cannot be justified by the stated business purpose or adequately guaranteed; other entities, based on "reasonable and sufficient evidence" of such a relationship. FI MAY make small loans to non-executive employees (up to 0.15% of net worth per employee, max. 1.5% of net worth total) (Law on Banks, Art. 50, 54).
Closed Cooperatives
Permitted: Savings (through issuing contribution certificates); loans. Prohibited: Taking on obligations that exceed the sum of the members' supplemental responsibility; deposit-taking (or issuing share certificates) (Supreme Decree No. 24,439, Art. 31-32).
Max. Credit to Individual Borrower or Borrowing Group: 3% of equity (secured), 1% (with personal guarantee) (WOCCU, 2005).
Depositor protection mechanisms (e.g., deposit insurance or lender of last resort)
Banks
Commercial Banks
On-site supervision and off-site surveillance. On-site supervision varies with institution-specific risks (greater supervision for FFPs and open cooperatives), while off-site surveillance is similar for banks and other FIs (NABARD,2001).
SBEF can charge annual fees of up to 1% of the FI's assets (including contingent operations). In practice, annual fees are much lower (about 0.001%) (Law on Banks, Art. 159) (NABARD,2001).
Reporting: Must submit annual financial statements with external auditor's report to SBEF. Other requirements include: investments; securities; assets and liabilities. Disclosure: Must publish financial statements twice per year in nationwide newspapers. Internal auditors must disclose any noncompliance with standards or legal provisions to shareholders, partners, associates, and the SBEF (Law on Banks, Art. 94, 98) (NABARD,2001).
All FIs must contribute to Bolivia's Financial Restructuring Fund (FRF) quarterly until their contribution totals 5% of total deposits. The FRF will cover 30% of a failing FI's "total preferred obligations", which include private deposits (which have priority in payout); and public, BCB, and foreign FI deposits (which are subordinate to private deposits). There is no minimum guaranteed payout per depositor; both large and small depositors are covered for the same percentage of their deposits (Deposit Insurance Impact, Ioannidou & de Dreu) (Law No. 2297
, Art. 127 (Spanish)).
Non-bank Financial Institutions
Private Financial Funds
On-site supervision and off-site surveillance. On-site supervision varies with institution-specific risks (greater supervision for FFPs and open cooperatives), while off-site surveillance is similar for banks and other FIs (NABARD,2001).
SBEF can charge annual fees of up to 1% of the FI's assets (including contingent operations). In practice, annual fees are much lower (about 0.001%) (Law on Banks, Art. 159) (NABARD,2001).
Reporting: Must submit annual financial statements with external auditor's report to SBEF. Other requirements include: monthly portfolio recovery statistics; portfolio classification; anticipated payments; pending accounts; costs to recover; assets and liabilities; deferred charges; items pending charges; obligations with financial entities; subordinated obligations. Regulated MFIs submit about 500 statements annually to the SBEF. Disclosure: Must publish financial statements twice per year in nationwide newspapers. Internal auditors must disclose any noncompliance with standards or legal provisions to shareholders, partners, associates, and the SBEF (Law on Banks, Art. 94, 98) (NABARD,2001).
All FIs must contribute to Bolivia's Financial Restructuring Fund (FRF) quarterly until their contribution totals 5% of total deposits. The FRF will cover 30% of a failing FI's "total preferred obligations", which include private deposits (which have priority in payout); and public, BCB, and foreign FI deposits (which are subordinate to private deposits). There is no minimum guaranteed payout per depositor; both large and small depositors are covered for the same percentage of their deposits (Deposit Insurance Impact, Ioannidou & de Dreu) (Law No. 2297
, Art. 127 (Spanish)).
Mutual Benefit Savings and Home Loan Societies
On-site supervision and off-site surveillance. On-site supervision varies with institution-specific risks (greater supervision for FFPs and open cooperatives), while off-site surveillance is similar for banks and other FIs (NABARD,2001).
SBEF can charge annual fees of up to 1% of the FI's assets (including contingent operations). In practice, annual fees are much lower (about 0.001%) (Law on Banks, Art. 159) (NABARD,2001).
Reporting: Must submit annual financial statements with external auditor's report to SBEF. Regulated MFIs submit about 500 statements annually to the SBEF. Disclosure: Must publish financial statements twice per year in nationwide newspapers. Internal auditors must disclose any noncompliance with standards or legal provisions to shareholders, partners, associates, and the SBEF (Law on Banks, Art. 94, 98).
All FIs must contribute to Bolivia's Financial Restructuring Fund (FRF) quarterly until their contribution totals 5% of total deposits. The FRF will cover 30% of a failing FI's "total preferred obligations", which include private deposits (which have priority in payout); and public, BCB, and foreign FI deposits (which are subordinate to private deposits). There is no minimum guaranteed payout per depositor; both large and small depositors are covered for the same percentage of their deposits (Deposit Insurance Impact, Ioannidou & de Dreu) (Law No. 2297, Art. 127 (Spanish)).
Cooperatives/Credit Unions
Open Cooperatives
On-site supervision and off-site surveillance. On-site supervision varies with institution-specific risks (greater supervision for FFPs and open cooperatives), while off-site surveillance is similar for banks and other FIs (NABARD,2001).
SBEF can charge annual fees of up to 1% of the FI's assets (including contingent operations). In practice, annual fees are much lower (about 0.001%) (Law on Banks, Art. 159) (NABARD, 2001).
Reporting: Must submit annual financial statements with external auditor's report to SBEF. Other requirements include: monthly portfolio recovery statistics; portfolio classification; anticipated payments; pending accounts; costs to recover; assets and liabilities; deferred charges; items pending charges; obligations with financial entities; subordinated obligations. Regulated MFIs submit about 500 statements annually to the SBEF. Disclosure: Must publish financial statements twice per year in nationwide newspapers. Internal auditors must disclose any noncompliance with standards or legal provisions to shareholders, partners, associates, and the SBEF. Must publicly display amounts of: loans granted; deposits in FIs; and details of investments made (Law on Banks, Art. 94, 98) (NABARD,2001) (WOCCU, 2005).
All FIs must contribute to Bolivia's Financial Restructuring Fund (FRF) quarterly until their contribution totals 5% of total deposits. The FRF will cover 30% of a failing FI's "total preferred obligations", which include private deposits (which have priority in payout); and public, BCB, and foreign FI deposits (which are subordinate to private deposits). There is no minimum guaranteed payout per depositor; both large and small depositors are covered for the same percentage of their deposits (Deposit Insurance Impact, Ioannidou & de Dreu) (Law No. 2297, Art. 127 (Spanish)).
Subject to INALCO's control, regulations, and monitoring. Must provide members with access to information updated every 3 months describing: loans granted; deposits in FIs; and details of investments made (Supreme Decree No. 24,439), Art. 38 (WOCCU, 2005).
Reporting: Every three years, must describe: loan portfolio (current, late, lost) with respect to region, branch, target population, and credit methodology; and financing, goals, and objectives for past and future projects (NGO Registration Requirements, VIPFE (Spanish)).
All FIs: Voluntary generic provisions are tax-exempt (up to 2% of assets) (Law on Banks, Art. 49).
MFI-specific
MFI-specific
Charitable non-profit organizations are not exempted if they engage in financial intermediation (Doing Business, E&Y [PDF]).
Some forms of financial intermediation exempted from VAT and Transaction Tax (Doing Business, E&Y [PDF]).
Other Relevant Business Legislation
Debt Enforcement and Collection
Credit Rating and Reporting Requirements, Services
General Applicability
General Applicability
FIs must provision for 25% of book value of collected property. If property is not sold within one year of award date, must provision 50% (1-2 years post-award) or 100% (over 2 years post-award) (Law on Banks, Art. 57).
MFI-specific
MFI-specific
The SBEF has issued regulations for opening Credit Information Bureaus to allow regulated MFIs to access credit information provided by unregulated MFIs, and vice-versa, in an effort to reduce over-indebtedness (ASOFIN,2006).
