Overview of Banking in Bolivia

Bolivia is among the quickest rising economies in Latin America, and good and forward-looking international buyers and corporations are giving the land-locked nation a more in-depth look when it comes to doing enterprise there. Bolivia outperformed its neighbors in 2022, seeing GDP growth of 3.9 percent, and is forecasted to grow by 4.8 percent in 2023. The circulate of FDI into the country is also on the rise; all which means that we will anticipate an inflow of international companies incorporating within the nation, and people newcomers will set their sights on banking in Bolivia. 

But when there’s one factor that characterizes banking in Bolivia, it’s state intervention and taxes, taxes, taxes. Tax on the shopping for and promoting of the US greenback, taxes on a financial institution’s earnings, and taxes on any cash leaving the nation. There’s even a tax on transfers between one Bolivian bank to another. The aim of all this, we’re assured, is to stimulate financial progress.

If there’s one silver lining to the excessive diploma of state intervention into the Bolivian banking system, it’s that these tax burdens are incurred virtually solely by the banks themselves. By regulation, the prices can’t be handed onto the client by means of excessive rates of interest or charges. Rates of interest are set by the state-run monetary establishment known as the Productive Growth Financial institution (BDP), and is used to offer low-rate loans to small and medium-sized enterprises (SMEs). 

For international entities, the steps to open a company checking account in Bolivia are comparatively straight ahead. 

Open a corporate bank account for banking in Bolivia, infographic by biz latin hub
In case you’re pondering of banking in Bolivia, you must know the right way to open a company checking account within the nation

Banking in Bolivia: Record of business banks within the nation

Bolivia’s banking system is made up of the Central Financial institution, the state-run BDP, and 13 privately-owned business banks, the place foreigners can open company financial institution accounts. The complete list is as follows:

  • Banco Bisa
  • Banco de Crédito (BCP)
  • Banco Económico
  • Banco Fassil
  • Banco Fie
  • Banco Fortaleza
  • Banco Ganadero
  • Banco Mercantil Santa Cruz
  • Banco de la Nación Argentina
  • Banco Nacional de Bolivia (BNB)
  • Banco Prodem
  • BancoSol Financial institution 
  • Banco Unión

SEE ALSO: Professionals Boosting Expertise and Innovation in Bolivia

When eager about improvements within the monetary sector and/or banking in Bolivia, one might discover that they’re not likely revolutionary in any respect – within the developed world, that’s. However issues like “neobank” fintech startups, microcredit loans given to lower-income Bolivians, and what’s generally known as the digital transformation are certainly revolutionary for Bolivia – a late adopter in lots of respects.

Banking in Bolivia: A few of the newest improvements

  • Small mortgage functions (microfinance) made on-line
  • Smartphone-based cellular pockets banking/purchases
  • ‘Gamification’ to attract in new adopters
  • Neobank startups providing 100% on-line providers
  • Conventional banks transferring slowly towards digital transformation

High-5 improvements for banking in Bolivia

The next improvements in banking have made making transactions and requesting small enterprise capital way more handy for Bolivians than they’re in conventional banks.

1. Microfinance mortgage functions made on-line

If there’s innovation within the Bolivian banking trade, it’s in offering microfinance to small companies – however digitally. Banks have partnered with the non-profit groups to supply low-interest loans to small enterprise house owners and prospects – as long as they’ve a cellular gadget.

2. Smartphone-based cellular pockets banking/purchases 

The recognition of mobile-based apps has exploded, and is altering the way in which banking is finished in Bolivia. The so-called cellular wallets they supply will not be tied to the extra conventional brick-and-mortar banks, however by means of digital startups within the nation. It permits customers to ship and obtain funds, pay payments and switch cash all from a person’s smartphone.

3. ‘Gamification’ scheme to draw new adopters

The aforementioned financial institution that gives microfinancing to small companies additionally employs a gamification technique to draw new customers to the app and hold present customers loyal. Users can earn points and play mini-games inside the app for rewards and an opportunity to win prizes. With this technique, BancoSol financial institution was in a position to get 40 % of its account holders to make the digital transformation. 

4. The rise of ‘neobanks’ providing 100% on-line providers

So-called ‘neobanks’ have been a rising development in Bolivia and elsewhere within the area. Why have Bolivians normally, and Latin Individuals specifically, been so receptive to the providers supplied by neobanks and different fintechs? In a phrase, inclusivity. Individuals with decrease incomes have been ignored or uncared for by the standard banks, which means that fifty % of Bolivians don’t have entry to a conventional checking account. The rise of neobanks represents a sea-change to banking in Bolivia, permitting individuals to bypass conventional banks so as to take part within the monetary system.

legal structures in bolivia infographic by biz latin hub for an article on banking in bolivia
Banking in Bolivia is supported by the nation’s authorized buildings

5. Conventional banks are late to digital transformation

As is often the case, banks are reluctant to maneuver from their dominant place. Whereas on-line banking has been round for many years, banks in Bolivia have solely just lately realized that they too should succumb to the grand digital transformation if they’re to remain related. Most conventional brick-and-mortar banks now have on-line platforms the place Bolivian account holders could make transactions, open new accounts or apply for debit/bank cards. 

Biz Latin Hub will help you with banking in Bolivia

At Biz Latin Hub, we offer built-in market entry and back-office providers all through Latin America and the Caribbean, with workplaces in Bogota and Cartagena, in addition to over a dozen different main cities within the area. We even have trusted companions in lots of different markets.

Our unequalled attain means we’re ideally positioned to assist multi-jurisdiction market entries and cross border operations.

In addition to information about banking in Bolivia, our portfolio of providers contains hiring & PEO accounting & taxation, firm formation, checking account opening, and company authorized providers.

Contact us right this moment to search out out extra about how we will help you to find high expertise, or in any other case do enterprise in Latin America and the Caribbean.

If this text on banking in Bolivia was of curiosity to you, try the remainder of our protection of the area. Or examine our staff and knowledgeable authors. 

A BLH infogrpahic showing key services offered by the company
Key providers supplied by Biz Latin Hub