Bolivia’s Banking Boom Masks Housing Crisis: Asoban Report Reveals Uneven Growth
La Paz, Bolivia – November 15, 2025 – A new report from the Association of Private Banks of Bolivia (Asoban) paints a strikingly uneven picture of the nation’s financial health. While the banking sector is experiencing robust growth in profits and business lending, a concerning contraction in financing for social housing is raising alarms about financial inclusion and access to a basic human right. This breaking news reveals a critical tension between market-driven profitability and the social responsibilities of Bolivia’s financial institutions – a story that demands attention from investors, policymakers, and Bolivian citizens alike. This is a developing story, and we’re committed to bringing you the latest updates as they unfold. For those following Google News trends, this represents a significant shift in the Bolivian economic landscape.
Profit Surge Alongside Housing Decline
According to the “Analysis of the banking sector as of October 2025,” banking profits have soared by an impressive 42.6%. Assets have grown by 12.2%, reaching $3,409 million, and the profitability on assets stands at a healthy 13.6%. Delinquency rates have even fallen to a record low of 3.0%, indicating strong financial stability. However, this positive trajectory is overshadowed by a 4.4% contraction in the social housing mortgage portfolio. Mortgage credit operations overall have declined by 2.4% in the last year.
The Asoban report attributes the decline in social housing financing to fixed interest rates – ranging between 5.5% and 6.5% – which are insufficient to cover the risks associated with long-term housing loans, particularly given limitations in funding availability. This isn’t simply a matter of bank strategy; it’s a systemic issue impacting the ability of Bolivians to achieve homeownership.
Business Lending Fuels Growth, Digitalization Takes Off
The good news isn’t limited to overall profitability. Business credit is leading the charge in expansion, with a year-on-year growth of 12.6%, spurred by adjustments to interest rates outlined in Supreme Decree 5403. Loans to medium-sized companies have also seen a boost, increasing from 2.1% growth in 2024 to 4.0% this year. The industry sector is now the primary driver of credit growth, accounting for 60% of the total.
Alongside traditional lending, digitalization is rapidly transforming the financial landscape. Interbank electronic transfers have exploded, increasing by 127% compared to 2024, with 89% of these transactions facilitated by QR codes for smaller amounts. This surge in digital transactions signals a growing “use” of the financial system and a move towards greater financial convenience for Bolivians. Understanding these trends is crucial for anyone interested in SEO and tracking the evolution of financial technology in emerging markets.
Financial Inclusion: A Paradoxical Picture
The report also highlights a complex situation regarding financial inclusion. While the number of deposit accounts has increased by over 1.5 million, and physical banking coverage now reaches 98% of municipalities, the number of active borrowers has decreased by more than 12,000 people. This suggests that access to an account doesn’t automatically translate to access to credit – a critical component of economic empowerment. This paradox underscores the need for targeted initiatives to encourage lending and support small businesses and individuals.
Evergreen Insight: The Bolivian experience mirrors a global challenge: expanding financial access without necessarily ensuring equitable access to credit. Historically, fixed interest rate schemes, while intended to protect borrowers, can inadvertently stifle lending if they don’t adequately account for risk and market conditions. Successful financial inclusion strategies require a holistic approach that addresses both access and affordability.
The Asoban report ultimately reveals a solid and profitable banking sector successfully channeling credit towards production and embracing digital innovation. However, this success comes at a cost – a widening gap in social housing and a reminder that private banking alone may not be sufficient to address long-term social needs. A robust public-private collaboration scheme is essential to bridge this gap and ensure that the benefits of economic growth are shared by all Bolivians. Stay tuned to archyde.com for continued coverage of this important story and in-depth analysis of the Bolivian economy.
