Bolivia’s Financial Sector Experiences Significant Growth Following Regulatory Reforms

In recent years, Bolivia has made significant strides in diversifying its economy and stimulating growth through a series of regulatory reforms aimed at strengthening its financial sector. The 2013 Financial Services Law (FSL) has been instrumental in achieving this goal, providing a framework for the country’s financial institutions to operate within.

Increasing Access to Financial Services

One of the key objectives of the FSL was to increase access to financial services for small and medium-sized enterprises (SMEs), which are often underserved by traditional banking systems. To achieve this:

The government established a deposit insurance scheme
A credit registry was implemented
Basel II and III principles were introduced

Supporting Small Businesses

The FSL also introduced business-friendly rates and grants to support the development of SMEs, resulting in:

A significant increase in agricultural productivity (7% margin on 2017 figures)
Social housing projects in rural areas supported by financial institutions, contributing to overall economic growth

The government’s commitment to promoting small businesses is evident through its ownership of a financial institution that provides extremely low-rate credit to start-ups and SMEs. This has enabled businesses to thrive and upgrade their equipment, leading to increased productivity and competitiveness.

Financial Sector Growth

Bolivia’s financial sector has seen significant growth in recent years, with:

Credit as a share of GDP increasing from 35% to 43%
The number of borrowers doubling over the past decade
The country’s economy now one of the fastest-growing in Latin America, with an average GDP growth rate of 4.7%

Transparency and Accountability

The FSL has introduced measures to ensure that financial institutions operate in a transparent and accountable manner, including:

Requirements for banks to disclose their loan portfolios and credit risk assessments

Fintech Market Opportunities

Bolivia’s fintech market is another area that offers significant investment opportunities, with the emergence of new companies specializing in financial technology presenting a very interesting investment opportunity. As Bolivia’s financial laws continue to evolve, it is expected that the fintech sector will experience exponential growth.

Investing in Bolivia

For foreign investors looking to capitalize on Bolivia’s growing economy and financial sector, there has never been a better time to invest in the country. The government is welcoming of foreign investment, but emphasizes the importance of maintaining control over trade and commerce within the country.

Get Started with Biz Latin Hub

At Biz Latin Hub, we provide a range of services designed to help expanding companies navigate the complexities of doing business in Bolivia. Our team of experts can guide you through:

Company formation
Compliance procedures
Regulatory requirements