Major Digital Bank In Paraguay Collapses With Half of Population's Savings

Paraguayan President Santiago Pena resigned Thursday amid mass protests and impeachment threats following the collapse of Ueno Bank, a major digital lender with close ties to his administration and more than 60% of the country's adults as customers. Regulators seized the bank after uncovering risky insider lending and accounting irregularities that left its capital below legal requirements, locking millions of customers out of their savings. The Associated Press reports: Soon after winning its banking license in 2023, Ueno seemed to be everywhere in Paraguay. The digital lender, a rebranded version of a decades-old finance company, lured customers with generous cash-back offers on groceries, grew to more than 70 locations, sponsored Paraguay's national soccer team and plastered its name on the country's main stadium. Government money poured into Ueno's coffers under Pena. He also appointed Carlos Carvallo, president of Financiera Ueno, the predecessor to Ueno Bank, to run the central bank, the agency charged with supervising the digital lender. As of last month, Ueno reported holding roughly $800 million in public deposits, about a quarter of its total, including money from the sta