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Library » Regulatory and Supervisory Mechanism for MFIs in Bolivia

Regulatory and Supervisory Mechanism for MFIs in Bolivia
2001, NABARD

How are Bolivian MFIs regulated?

The paper describes the present scenario of the Bolivian financial sector which consists of first tier financial institutions - commercial banks (CBs), Non-banking Financial Entities (NBFEs) and second tier financial institutions – FUNDAPRO (private), FONDESIF (public) and NAFIBO (public). The paper defines the processes for regulation and supervision of the MFIs by:

Regulatory norms: Portfolio evaluation and portfolio classification;
Prudential norms: Capital adequacy, provisioning and avoiding double or multiple financing.

Finally the paper presents the study team’s learning:

User friendly technology through standardization of accounting systems and computerization helps the management in taking appropriate policy and operational decisions;
Transparency in credit operations builds borrower confidence and puts all operations above board;
Though compensation packages based on basic salary, plus incentives based on business generated, help in business development, they also have an inbuilt bias against smaller loans.

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Publisher(s):
National Bank for Agriculture and Rural Development