B.C.B. / DGD-VUC 2014 APR 21 AM 9:38

EXTERNAL CIRCULAR OF THE CENTRAL BANK OF BOLIVIA La Paz, April 17, 2014 SGDB No. 012/2014

FROM: GENERAL MANAGEMENT FINANCIAL ENTITIES MANAGEMENT TO: FINANCIAL ENTITIES SUBJECT: SURVEY ON CREDIT MARKET CONDITIONS

Ladies and Gentlemen:

We are sending the reference survey corresponding to the first quarter of 2014 for it to be answered by the highest executive of the area responsible for credits in your institution. We would appreciate the submission of the form to the Central Bank of Bolivia no later than Thursday, April 24, 2014. Any inquiries will be attended to by Lic. Marco Belmonte at phone number 2664942 or via email at mbelmonte@bcb.gob.bo.

Sincerely.

MMV/MAAM/OID/MBF Adj.: As indicated

Ayacucho y Mercado • Tel:(591-2) 2409090 • P.O. Box: 3118 www.bcb.gob.bo • bcb@bcb.gob.bo • La Paz-Bolivia

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Survey on Credit Market Conditions

This survey aims to collect qualitative information on the perception of financial entities regarding the evolution of factors affecting the credit market. It is directed at the highest executives of the area responsible for granting loans.

A. General Data

Institution: ....................................................................................................................................................................

Name of the person responding: ...........................................................................................................................

Position: ............................................................................................................................................................................

Phone: ........................................................................... Fax: ...................................................................................

Email: ........................................................................................................................................................................................

Instructions

1. This survey consists of a set of statements that must be marked with the alternative that best reflects the respondent's opinion.
2. The evaluation of each statement must be compared with the results of the similar quarter of the previous management year.
3. In the "other reasons" or "others" option, the corresponding reason or item must be specified in the form.
4. Questions I, J, K, L, and M regarding social interest housing credit have been incorporated into this form.

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Approval Standards

B. In the first quarter of the 2014 management year, the standards for loan approval were:

B.1 Corporate (If not applicable, go to point B.2)	B.2 SME (If not applicable, go to point B.3)	B.3 Microcredit (If not applicable, go to point B.4)
More restrictive / Similar / Less restrictive	More restrictive / Similar / Less restrictive	More restrictive / Similar / Less restrictive

B.4. If you chose "more restrictive," go to question B.4.1 for the corresponding type of credit. If you chose "less restrictive," go to question B.4.2 for the corresponding type of credit.

B.4.1 If the approval standards were "more restrictive," prioritize the factors that explain these changes (1 most important and 5 least important)

Factors	Corporate (Prioritization)	SME (Prioritization)	Microcredit (Prioritization)
Deterioration in companies' payment capacity	[ ]	[ ]	[ ]
Deterioration of the value of presented collateral	[ ]	[ ]	[ ]
Deterioration of the institution's funding conditions	[ ]	[ ]	[ ]
Institution's preference for other types of credits or assets	[ ]	[ ]	[ ]
Other reasons:	[ ]	[ ]	[ ]

B.4.2 If the approval standards were "less restrictive," prioritize the factors that explain these changes (1 most important and 5 least important)

Factors	Corporate (Prioritization)	SME (Prioritization)	Microcredit (Prioritization)
Improvement in companies' payment capacity	[ ]	[ ]	[ ]
Increase in the value of presented collateral	[ ]	[ ]	[ ]
Better funding conditions for the institution	[ ]	[ ]	[ ]
Institution's preference for this type of credit compared to other types of credits or assets	[ ]	[ ]	[ ]
Other reasons:	[ ]	[ ]	[ ]

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Approval Standards

B. In the first quarter of the 2014 management year, the standards for loan approval were:

B.5 Housing excluding social interest housing credits (If not applicable, go to point B.6)	B.6 Consumer (If not applicable, go to point B.7)
More restrictive / Similar / Less restrictive	More restrictive / Similar / Less restrictive

B.7. If you chose "more restrictive," go to question B.7.1 for the corresponding type of credit. If you chose "less restrictive," go to question B.7.2 for the corresponding type of credit.

B.7.1 If the approval standards were "more restrictive," prioritize the factors that explain these changes (1 most important and 5 least important)

Factors	Housing excluding social interest housing credits (Prioritization)	Consumer (Prioritization)
Deterioration in households' payment capacity	[ ]	[ ]
Deterioration of the value of presented collateral	[ ]	[ ]
Deterioration of the institution's funding conditions	[ ]	[ ]
Institution's preference for other types of credits or assets	[ ]	[ ]
Other reasons:	[ ]	[ ]

B.7.2 If the approval standards were "less restrictive," prioritize the factors that explain these changes (1 most important and 5 least important)

Factors	Housing excluding social interest housing credits (Prioritization)	Consumer (Prioritization)
Improvement in households' payment capacity	[ ]	[ ]
Increase in the value of presented collateral	[ ]	[ ]
Better funding conditions for the institution	[ ]	[ ]
Institution's preference for this type of credit compared to other types of credits or assets	[ ]	[ ]
Other reasons:	[ ]	[ ]

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Loan Applications (Demand)

C. In the first quarter of the 2014 management year, loan applications (demand) behaved as follows:

C.1 Corporate (If not applicable, go to point C.2)	C.2 SME (If not applicable, go to point C.3)	C.3 Microcredit (If not applicable, go to point C.4)
Increased / Remained stable / Decreased	Increased / Remained stable / Decreased	Increased / Remained stable / Decreased

C.4. If you chose "increased," go to question C.4.1 for the corresponding type of credit. If you chose "decreased," go to question C.4.2 for the corresponding type of credit.

C.4.1 If "increased," prioritize the loan purposes that influenced this behavior (1 most important and 5 least important)

Factors	Corporate (Prioritization)	SME (Prioritization)	Microcredit (Prioritization)
Increase in working capital needs	[ ]	[ ]	[ ]
Increase in investment capital needs	[ ]	[ ]	[ ]
Increase in fixed asset replacement needs	[ ]	[ ]	[ ]
Higher applications for purchasing debt from other financial entities	[ ]	[ ]	[ ]
Other: ...	[ ]	[ ]	[ ]

C.4.2 If "decreased," prioritize the loan purposes that influenced this behavior (1 most important and 5 least important)

Factors	Corporate (Prioritization)	SME (Prioritization)	Microcredit (Prioritization)
Decrease in working capital needs	[ ]	[ ]	[ ]
Decrease in investment capital needs	[ ]	[ ]	[ ]
Decrease in fixed asset replacement needs	[ ]	[ ]	[ ]
Lower applications for purchasing debt from other financial entities	[ ]	[ ]	[ ]
Other:	[ ]	[ ]	[ ]

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Loan Applications (Demand)

C. In the first quarter of the 2014 management year, loan applications (demand) behaved as follows:

C.5 Housing excluding social interest housing credits (If not applicable, go to point C.6)	C.6 Consumer (If not applicable, go to point C.7)
Increased / Remained stable / Decreased	Increased / Remained stable / Decreased

C.7. If you chose "increased," go to question C.7.1 for the corresponding type of credit; if you chose "decreased," go to question C.7.2 for the corresponding type of credit.

C.7.1 If applications for housing credits (excluding social interest housing) "increased," prioritize the loan purposes that influenced this behavior (1 most important and 5 least important). C.7.1 If applications for consumer credits "increased," prioritize the loan purposes that influenced this behavior (1 most important and 4 least important).

Factors (Housing)	Prioritization	Factors (Consumer)	Prioritization
Housing construction	[ ]	New vehicle purchase	[ ]
Housing acquisition	[ ]	Used vehicle purchase	[ ]
Housing renovation	[ ]	Household goods purchase	[ ]
Higher applications for purchasing debt from other financial entities	[ ]	Other (specify):	[ ]
Other:....	[ ]

C.7.2 If applications for housing credits (excluding social interest housing) "decreased," prioritize the loan purposes that influenced this behavior (1 most important and 5 least important). C.7.2 If applications for consumer credits "decreased," prioritize the loan purposes that influenced this behavior (1 most important and 4 least important).

Factors (Housing)	Prioritization	Factors (Consumer)	Prioritization
Housing construction	[ ]	New vehicle purchase	[ ]
Housing acquisition	[ ]	Used vehicle purchase	[ ]
Housing renovation	[ ]	Household goods purchase	[ ]
Lower applications for purchasing debt from other financial entities	[ ]	Other (specify):	[ ]
Other:....	[ ]

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Loan Approvals

D. In the first quarter of the 2014 management year, loan approvals behaved as follows:

D.1 Corporate (If not applicable, go to point D.2)	D.2 SME (If not applicable, go to point D.3)	D.3 Microcredit (If not applicable, go to point D.4)
Increased / Remained stable / Decreased	Increased / Remained stable / Decreased	Increased / Remained stable / Decreased

D.4. If you chose "increased," go to question D.4.1 for the corresponding type of credit. If you chose "decreased," go to question D.4.2 for the corresponding type of credit.

D.4.1 If "increased," prioritize the loan purposes that influenced this behavior (1 most important and 5 least important)

Factors	Corporate (Prioritization)	SME (Prioritization)	Microcredit (Prioritization)
Increase in working capital needs	[ ]	[ ]	[ ]
Increase in investment capital needs	[ ]	[ ]	[ ]
Increase in fixed asset replacement needs	[ ]	[ ]	[ ]
Higher approvals for purchasing debt from other financial entities	[ ]	[ ]	[ ]
Other: ...	[ ]	[ ]	[ ]

D.4.2 If "decreased," prioritize the loan purposes that influenced this behavior (1 most important and 5 least important)

Factors	Corporate (Prioritization)	SME (Prioritization)	Microcredit (Prioritization)
Decrease in working capital needs	[ ]	[ ]	[ ]
Decrease in investment capital needs	[ ]	[ ]	[ ]
Decrease in fixed asset replacement needs	[ ]	[ ]	[ ]
Lower approvals for purchasing debt from other financial entities	[ ]	[ ]	[ ]
Other: ...	[ ]	[ ]	[ ]

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Loan Approvals

D. In the first quarter of the 2014 management year, loan approvals behaved as follows:

D.5 Housing excluding social interest housing credits (If not applicable, go to point D.6)	D.6 Consumer (If not applicable, go to point D.7)
Increased / Remained stable / Decreased	Increased / Remained stable / Decreased

D.7. If you chose "increased," go to question D.7.1 for the corresponding type of credit; if you chose "decreased," go to question D.7.2 for the corresponding type of credit.

D.7.1 If approvals for housing credits (excluding social interest housing) "increased," prioritize the loan purposes that influenced this behavior (1 most important and 5 least important). D.7.1 If approvals for consumer credits "increased," prioritize the loan purposes that influenced this behavior (1 most important and 4 least important).

Factors (Housing)	Prioritization	Factors (Consumer)	Prioritization
Housing construction	[ ]	New vehicle purchase	[ ]
Housing acquisition	[ ]	Used vehicle purchase	[ ]
Housing renovation	[ ]	Household goods purchase	[ ]
Higher applications for purchasing debt from other financial entities	[ ]	Other (specify):	[ ]
Other:....	[ ]

D.7.2 If approvals for housing credits (excluding social interest housing) "decreased," prioritize the loan purposes that influenced this behavior (1 most important and 5 least important). D.7.2 If approvals for consumer credits "decreased," prioritize the loan purposes that influenced this behavior (1 most important and 5 least important).

Factors (Housing)	Prioritization	Factors (Consumer)	Prioritization
Housing construction	[ ]	New vehicle purchase	[ ]
Housing acquisition	[ ]	Used vehicle purchase	[ ]
Housing renovation	[ ]	Household goods purchase	[ ]
Lower applications for purchasing debt from other financial entities	[ ]	Other (specify):	[ ]
Other:....	[ ]

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Rejection of Credit Applications

E. Prioritize the most important reasons why credit applications were not approved during the first quarter of 2014 (1 most important and 5 least important):

Reasons	Corporate (Prioritization)	SME (Prioritization)	Microcredit (Prioritization)	Housing (excluding social interest housing credits) (Prioritization)	Consumer (Prioritization)
Insufficient level of collateral	[ ]	[ ]	[ ]	[ ]	[ ]
Insufficient income projection to meet debt payments	[ ]	[ ]	[ ]	[ ]	[ ]
Insufficient information on repayment sources and credit history	[ ]	[ ]	[ ]	[ ]	[ ]
Inadequate client credit record	[ ]	[ ]	[ ]	[ ]	[ ]
Other (specify):	[ ]	[ ]	[ ]	[ ]	[ ]

Funding Sources

F.1 In the first quarter of the 2014 management year, the funding of your institution's credit portfolio by funding type behaved as follows:

	Substantially Increased	Increased	Remained Stable	Decreased	Substantially Decreased	Not Applicable
Public Deposits	[ ]	[ ]	[ ]	[ ]	[ ]	[ ]
Domestic funding lines for productive lending	[ ]	[ ]	[ ]	[ ]	[ ]	[ ]
Domestic funding lines for housing provision	[ ]	[ ]	[ ]	[ ]	[ ]	[ ]
External funding lines for productive lending	[ ]	[ ]	[ ]	[ ]	[ ]	[ ]
Other sources:...	[ ]	[ ]	[ ]	[ ]	[ ]	[ ]

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F.2 In the first quarter of the 2014 management year, the average financial cost of funding sources behaved as follows:

	Substantially Increased	Increased	Remained Stable	Decreased	Substantially Decreased	Not Applicable
Public Deposits	[ ]	[ ]	[ ]	[ ]	[ ]	[ ]
Domestic funding lines for productive lending	[ ]	[ ]	[ ]	[ ]	[ ]	[ ]
Domestic funding lines for housing provision.	[ ]	[ ]	[ ]	[ ]	[ ]	[ ]
External funding lines for productive lending	[ ]	[ ]	[ ]	[ ]	[ ]	[ ]
Other sources:...	[ ]	[ ]	[ ]	[ ]	[ ]	[ ]

Expectations

G. For the next quarter, it is expected that credits will behave as follows in relation to the similar quarter of the previous management year:

G.1 Corporate (If not applicable, go to point G.2)	G.2 SME (If not applicable, go to point G.3)	G.3 Microcredit (If not applicable, go to point G.4)
Increase / Remain stable / Decrease	Increase / Remain stable / Decrease	Increase / Remain stable / Decrease

G.4 Housing excluding social interest housing credits (If not applicable, go to point G.5)	G.5 Consumer (If not applicable, go to point G.6)
Increase / Remain stable / Decrease	Increase / Remain stable / Decrease

G.6. Indicate the three main reasons justifying your answer to the previous questions for each type of credit, listing them in order of importance (1 the most important reason).

Corporate	SME	Microcredit
1.	1.	1.
2.	2.	2.
3.	3.	3.
Housing excluding social interest housing credits	Consumer
1.	1.
2.	2.
3.	3.

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H. For the next quarter, it is expected that credits to the productive sector will behave as follows in relation to the similar quarter of the previous management year:

	H.1 Corporate (If not applicable, go to point H.2)	H.2 SME (If not applicable, go to point H.3)	H.3 Microcredit
	Increase / Remain stable / Decrease	Increase / Remain stable / Decrease	Increase / Remain stable / Decrease
Agroindustry and/or rural sector	[ ] [ ] [ ]	[ ] [ ] [ ]	[ ] [ ] [ ]
Manufacturing industry	[ ] [ ] [ ]	[ ] [ ] [ ]	[ ] [ ] [ ]
Construction	[ ] [ ] [ ]	[ ] [ ] [ ]	[ ] [ ] [ ]
Other (specify):	[ ] [ ] [ ]	[ ] [ ] [ ]	[ ] [ ] [ ]

Social Interest Housing Credit - Loan Applications (Demand)

I. In the first quarter of the 2014 management year, applications for loans destined for social interest housing were:

I.1 Social Interest Housing Credit
Lower than expected / As expected / Higher than expected

I.2 Prioritize the loan purposes of social interest housing credit applications (1 most important and 6 least important)

Factors	Prioritization
Housing construction	[ ]
Housing acquisition	[ ]
Land acquisition	[ ]
Anticrético (Right of habitation)	[ ]
Housing renovation or improvement	[ ]
Applications for purchasing debt from other financial entities	[ ]

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Social Interest Housing Credit - Loan Approvals

J. Prioritize the loan purposes of social interest housing credits that were approved during the first quarter of 2014 (1 most important and 6 least important):

Factors	Prioritization
Housing construction	[ ]
Housing acquisition	[ ]
Land acquisition	[ ]
Anticrético (Right of habitation)	[ ]
Housing renovation or improvement	[ ]
Applications for purchasing debt from other financial entities	[ ]

Social Interest Housing Credit - Rejection of Credit Applications

K. Prioritize the most important reasons why social interest housing credit applications were not approved during the first quarter of 2014 (1 most important and 5 least important):

Factors	Prioritization
Insufficient income-to-payment ratio	[ ]
Insufficient information on repayment sources	[ ]
Inadequate client credit record	[ ]
Prior existence of a real estate property owned by the applicant	[ ]
Inadequate documentation of the real estate property to be used as collateral (in case of social interest housing credit with mortgage guarantee)	[ ]

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Applications for Interest Rate Modifications to Social Interest Housing Credit Levels

L. Prioritize the nature of social interest housing credit operations carried out during the first quarter of 2014 (1 most important and 4 least important):

Factors	Prioritization
New operations	[ ]
Renegotiation with the client	[ ]
Reclassification performed by the entity	[ ]
Others:	[ ]

Social Interest Housing Credit - Expectations

M. For the next quarter, it is expected that social interest housing credits will behave as follows:

M.1 Social Interest Housing Credit
Increase / Remain stable / Decrease