The altitude in La Paz can slowly sneak up on you and make a casual stroll in the park seem like an arduous, uphill struggle. An overhaul of Bolivia’s banking regulations is starting to have a similar effect on the country’s lending environment.
Despite that, the banking sector is in reasonably good shape. Over the last 10 years Bolivian banks have been on a tear, boosted by a hydrocarbons boom that has tripled the size of the country’s economy (GDP growth is expected to be around 4% in 2017, its slowest rate since 2009).
At the end of 2017, the banking system’s loan portfolio had grown to $20 billion, five-and-a-half times bigger than it was a decade earlier, according to Asoban, Bolivia’s association of private banks. While the commodity price shock in 2015 saw much of the region’s banking system scale back lending, Bolivian banks have barely slowed down, with loan growth averaging 20% a year since 2013, according to Moody’s.
“It’s a good moment for this industry, these are the golden years for Bolivian banks,” says Franco Urquidi, national vice-president of business at Banco Bisa, the country’s fourth largest lender by assets.