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Bolivia: an economy (almost) without state owned banks. Juan Antonio Morales Central Bank of Bolivia February 2005. Outline. Preliminaries A short history of SOB The transition The current situation. Preliminaries. At the end of the 1980s Bolivia had: 2 state owned “development” banks
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Juan Antonio Morales
Central Bank of Bolivia
At the end of the 1980s Bolivia had:
2 state owned “development” banks
1 “development bank” within the Central
1 state owned commercial bank
be explained by:
the SODB were in fact multipurpose organizations
with multiple stakeholders.
By mid 1990s, GD had become only a small player in the
The main perceived advantage of its credits was that they
But borrowers, in a era of abundant capital, underestimated
refinancing risks and preferred to borrow from the private
banks’ own resources.
(Banco del Estado) was:
Its loan portfolio was particularly problematic
Loans from the SOB were considered, to a large extent, “grants”. This weakened market discipline.
There was also a significant degree of loan diversion.
The operations of GD were interfered by monetary policy considerations.
In turn, these operations impaired the effectiveness of monetary policy.
seemed at play.
In retrospect, better bank regulations and supervision of private banks were needed before the closure of SOB.
liquidation of Banco del Estado.
The country is now better servedthan before the closure of Banco del Estado. The network of branches is now more extense, but the learning process took time and a significant amount of trial.
Our experience proves that if one can write a good contract, there is no need of a SOB to serve distant and rural populations.
FONDESIF, created initially as a fund to recapitalize banks in trouble, has shifted its operations to the refinancing of microfinance institutions.
It is evolving into a second tier SOB to refinance microfinance institutions.
The main remaining problem is the lack of long-term capital finance.
NAFIBO, to which the assets and liabilities of the Gerencia de Desarrollo, were to be transferred, has had a very slow take-off.