MULTIPLE BANKS AND SME BANKS
These institutions are empowered to perform a broad range of functions, including:
- Granting short-, medium-, and long-term loans with various types of collateral
- Operating with credit cards
- Factoring and financial leasing
- Buying and selling commercial papers
- Syndicated loans with other EIFs
- Channeling funds to other financial entities
The key difference is that SME Banks focus primarily on serving micro, small, and medium-sized enterprises.
SAVINGS AND CREDIT COOPERATIVES (CAC) AND HOUSING FINANCE ENTITIES (EFV)
- Open or corporate CACs: Can only operate with their members. They are not authorized to engage in factoring or leasing, unless specifically approved to issue credit cards.
- EFVs: Specialized in housing credit and micro-housing loans. They may lease residential properties for social housing purposes but are not authorized to offer factoring services.
DEVELOPMENT FINANCE INSTITUTIONS (IFD) AND COMMUNITY FINANCIAL ENTITIES (EFC)
- IFDs: Focused on productive and social financing. They are authorized to grant loans, trade financial instruments, transfer and acquire loan portfolios, and invest in innovative ventures.
- EFCs: At a basic level, they can only lend to members of the community organizations forming their communal capital. ASFI authorization is required to operate with third parties or expand services.
PUBLIC BANK AND BRANCHES OF FOREIGN BANKS
These institutions have similar powers to a Multiple Bank, including:
- Offering a range of credit and loan products
- Providing factoring and financial leasing services
- Syndicating financing operations
CONCLUSION
Authorized EIFs in Bolivia include Multiple Banks, SME Banks, open and corporate CACs, EFVs, IFDs, EFCs, the Public Bank, and branches of foreign banks. Each type of entity has specific scopes and limitations, but all play a fundamental role in enabling credit sales through instruments such as loans, document discounts, factoring, and credit cards. These entities are central to the expansion of formal financing and the protection of users within the regulated financial system.
Our law firm provides comprehensive legal assistance for creating, authorizing, and operating Financial Intermediation Entities in compliance with ASFI regulations. Contact us for tailored legal support.
Frequently Asked Questions (FAQs)
Can all EIFs offer credit sales?
Yes, although the specific mechanisms and restrictions depend on the type of entity and the authorizations granted by ASFI.
Can cooperatives operate with non-members?
No, unless they receive special authorization from ASFI for specific products.
What distinguishes an SME Bank from a Multiple Bank?
An SME Bank focuses primarily on micro, small, and medium-sized businesses, whereas a Multiple Bank serves a broader market.
Are EFVs allowed to offer factoring services?
No, their primary function is housing credit, and they are not authorized to engage in factoring.
Can EFCs lend to anyone?
No, they may only lend to members of their communal capital unless explicitly authorized to operate with third parties.
The content of this article does not reflect the technical opinion of Rigoberto Paredes & Associates and should not be considered a substitute for legal advice. The information presented herein corresponds to the date of publication and may be outdated at the time of reading. Rigoberto Paredes & Associates assumes no responsibility for keeping the information in this article up to date, as legal regulations may change over time.
