Boosting Credit Guarantee Funds
The Ministry of Economy and Public Finance has presented several results related to the financial system for fiscal year 2024, highlighting sustained growth over the past five years in two key areas: loans granted to the productive sector, which reached BOB 105.113 billion, and loans allocated to social interest housing, amounting to BOB 56.435 billion.
Loans to the productive sector are directed toward strategic areas of the economy, such as agriculture, manufacturing, construction, tourism, among others. Meanwhile, loans aimed at social interest housing have the primary objective of facilitating access to the acquisition, construction, and improvement of a primary residence for non-commercial purposes. They also allow for the purchase of land or the provision of capital for anticrético arrangements.
Both types of credit are characterized by low interest rates regulated by the government; however, they are also strengthened by the Credit Guarantee Fund for the Productive Sector (FOGACP) and the Credit Guarantee Fund for Social Interest Housing (FOGAVISP).
The main objective of the FOGACP is to guarantee up to 50% of the collateral required for loans granted to micro, small, and medium-sized enterprises in the productive sector, thereby facilitating access to financing and covering the equity contribution required by financial institutions. This initiative has a significant economic impact by promoting the modernization of productive processes and the creation of new jobs. In addition, it helps energize the national economy, supports the growth of domestic companies, reduces dependence on traditional sectors, and strengthens strategic productive areas.
For its part, the FOGAVISP aims to guarantee loans for social housing, allowing the substitution of the initial down payment. This mechanism plays a fundamental role in improving housing conditions for thousands of Bolivian families by reducing barriers to access to credit and enabling more people to acquire or improve their homes. This not only enhances quality of life and promotes social inclusion, but also drives growth in the construction sector, fostering job creation in key areas such as masonry, carpentry, and the production of construction materials, among others.
In a challenging economic context, strengthening and diversifying credit guarantee funds emerges as an important strategy to promote economic growth and development. It is essential to maximize their impact through the consolidation and expansion of existing funds, as well as the creation of new financial instruments aimed at strategic sectors or those that generate synergies with current funds. In this way, the continuity and strengthening of the positive trend observed can be ensured.
Author: Walter Marañon Quiñones
