World Bank2014-01-312014-01-312011-12https://hdl.handle.net/10986/16769Bolivia benefited from an overall favorable economic evolution in the last few years, supported by sound macro-economic indicators. Yet, economic growth was unevenly distributed between the sectors, with particularly extractive industries, construction and financial services showing higher real growth rates, while agriculture and manufacturing fell behind. This is an area of concern for the government which-as manifested in the new constitution-aims to foster a more balanced and equitable growth. In its reform measures, it places a particular focus on developing the rural areas, in which a large share of the indigenous population lives, and on the productive sector (agriculture, forestry, manufacturing and extractive), which provides the livelihood for a substantial number of poor people. This paper aims to contribute to the discussion and on-going reform efforts by providing an evaluation of the role the financial system could play for enhancing growth in rural areas and the productive sector without threatening the sector's stability. It also endeavors to update the Bank's knowledge on the financial sector, assess its current role and recent developments, and determine possible vulnerabilities as well as core bottlenecks for the outreach to underserved segments of the population and economy. However, the government needs to strike a fine balance in its policy measures to foster outreach and credit in order to not unduly lower the profitability in the financial sector, jeopardize the quality of the loan portfolio and as a result introduce vulnerability in an otherwise sound system. In particular, the strong push towards financing of the productive sector at comparatively low interest rates, can lead to over-indebtedness of the clients or a deterioration of the repayment culture, if lending institutions expanding their loan portfolios do not maintain (or introduce) prudent lendingen-USCC BY 3.0 IGOACCESS POINTSACCESS TO CREDITACCESS TO FINANCEACCESS TO FINANCIAL SERVICESACCESS TO FINANCINGACCESS TO INFORMATIONACCESS TO LOANSACCESS TO PAYMENTADMINISTRATIVE BURDENAFFORDABILITYAGRARIAN REFORMBALANCE SHEETBANK BRANCHBANK BRANCH NETWORKSBANK DEPOSITBANK DEPOSITSBANKING ACCOUNTSBANKING SYSTEMBANKRUPTCIESBANKSBARRIERS TO GROWTHBORROWERBRANCH NETWORKBUSINESS RELATIONSCAPITAL ADEQUACYCAPITAL FORMATIONCAPITAL MARKETCAPITAL REQUIREMENTSCASH TRANSFERSCENTRAL BANKCHECKING ACCOUNTCHECKING ACCOUNTSCOLLATERALCOLLATERAL REQUIREMENTSCOMMERCIAL BANKINGCOMMERCIAL BANKSCONSUMER CREDITCONSUMER PROTECTIONCOOPERATIVESCREDIT APPRAISALCREDIT BUREAUCREDIT BUREAUSCREDIT CARDSCREDIT GROWTHCREDIT GUARANTEECREDIT GUARANTEESCREDIT INSTITUTIONSCREDIT MARKETCREDIT PORTFOLIOCREDIT PRODUCTSCREDIT RISKCREDIT RISKSCREDITORCREDITORSCREDITSCROP INSURANCECURRENT ACCOUNTCURRENT ACCOUNTSDEBIT CARDSDEBTDEMAND FOR CREDITDEPOSITDEPOSIT ACCOUNTSDEPOSIT VOLUMEDEPOSITORDEPOSITORSDEPOSITSDEVELOPMENT BANKDIVERSIFICATIONE-COMMERCEEARNINGSECONOMIC GROWTHECONOMIC SYSTEMECONOMIES OF SCALEELECTRONIC PAYMENTELECTRONIC PAYMENTSELECTRONIC TRANSFERSEQUALITYEXCHANGE RATEFACILITATIONFINANCE COMPANIESFINANCE COMPANYFINANCIAL ACCESSFINANCIAL DEPTHFINANCIAL EDUCATIONFINANCIAL INFRASTRUCTUREFINANCIAL INSTITUTIONFINANCIAL INSTITUTIONSFINANCIAL INTERMEDIARIESFINANCIAL INTERMEDIATIONFINANCIAL LITERACYFINANCIAL PRODUCTSFINANCIAL SECTOR ASSESSMENTFINANCIAL SERVICEFINANCIAL SYSTEMFIXED CAPITALFOREIGN CURRENCYFOREIGN EXCHANGEFOREIGN INVESTMENTSFORMAL ECONOMYFORMAL FINANCIAL INSTITUTIONSFORMAL FINANCIAL SECTORFORMAL FINANCIAL SERVICESFORMS OF COLLATERALFUNDING SOURCESGOVERNMENT INTERVENTIONSGOVERNMENT POLICIESGRANT FUNDINGGROSS SETTLEMENT SYSTEMGUARANTEE SCHEMESHOUSEHOLDSHOUSING LOANSINCOME CATEGORYINCOME LEVELINCOME LEVELSINDEBTEDNESSINFORMATION ASYMMETRIESINFORMATION ON ENTERPRISESINFORMATION SYSTEMSINSTITUTIONAL REFORMSINTEREST RATEINVESTMENT CAPITALINVESTMENT CLIMATEINVESTMENT FINANCINGLACK OF COLLATERALLAND AS COLLATERALLAND MARKETLAND OWNERSHIPLAND RIGHTSLEGAL FRAMEWORKLENDING INTEREST RATESLENDING TECHNIQUESLEVEL OF INTEREST RATESLEVEL PLAYING FIELDLINES OF CREDITLIQUID ASSETSLIQUIDITYLOANLOAN AMOUNTSLOAN PORTFOLIOLOAN PORTFOLIOSLOAN PRODUCTSLOAN SIZELOW INTEREST RATESMARKET ACCESSMARKET DEVELOPMENTMARKET SHARESMFIMICRO ENTREPRENEURSMICRO-FINANCEMICRO-FINANCE INSTITUTIONSMICROCREDITMICROFINANCEMICROFINANCE INSTITUTIONSMICROFINANCE LENDINGMICROFINANCE SECTORMINIMUM CAPITAL REQUIREMENTSMOBILE PHONEMONETARY POLICYMORAL SUASIONMORTGAGEMORTGAGE LOANSMOVABLE ASSETSMOVABLE COLLATERALNON-PERFORMING LOANSOUTREACHPARTIAL CREDITPAYMENT HISTORYPAYMENT INFRASTRUCTUREPAYMENT SERVICESPAYMENT SYSTEMPENETRATION RATESPENSION FUNDSPENSIONSPLEDGE COLLATERALPOINT OF SALEPOINT OF SALESPRIVATE CREDITPRIVATE CREDIT BUREAUSPROFITABILITYPROPERTY RIGHTSPROTECTION MEASURESPROVISION OF CREDITPUBLIC BANKPUBLIC BANKSRATES OF RETURNREAL ESTATEREAL ESTATE AS COLLATERALREGULATORY FRAMEWORKREMITTANCESREPAYMENTRESERVE REQUIREMENTSRESTRICTIONS ON COLLATERALRISK MANAGEMENTRURAL BUSINESSESRURAL FINANCESAVINGSSAVINGS ACCOUNTSSAVINGS SERVICESSETTLEMENTSMALL BORROWERSSMALL ENTERPRISESSMALL FARMERSSOURCE OF INCOMESOURCES OF INCOMESTART-UPSTART-UP COSTSSUPPLY OF CREDITTAX INCENTIVESTECHNICAL ASSISTANCETECHNICAL SUPPORTUNIONUNREGULATED FINANCIAL INSTITUTIONSURBAN AREASVILLAGESVOLATILE INCOMEWORKING CAPITALWorld Bank10.1596/16769