Asunción (Paraguay) (AFP) – From star digital bank to epicenter of an economic and political crisis, Ueno Bank followed a path in less than five years that shook Paraguay: its closure froze deposits of millions of clients and precipitated the dismissal of President Santiago Peña.

First modification: 11/09/2026 - 17:35

The entity, which was presented as a symbol of innovation and financial inclusion, was declared unviable on November 3 by the Central Bank and eight of its directors are in prison.

Peña and the former president of the Central Bank Carlos Carvallo are also in preventive detention, while Paraguayans suffer uncertainty about their savings and an economy in a state of shock.

Here are five keys to understanding the rise and fall of Ueno and its consequences:

meteoric rise

Ueno emerged in December 2021 as a digital finance company, with 24-hour attention. In November 2023, it obtained a banking license and grew to reach three million clients in 2026, half of Paraguay's population, according to the entity itself.

The benefits it offered made it popular, especially among those who were unbanked.

Ueno also received funds from companies, organizations such as Conmebol and state entities such as the Social Security Institute and the Itaipú dam.

Giant with feet of clay

For the economist and former Minister of Finance Dionisio Borda, Ueno's was a "death foretold."

"Its growth in three years was very striking and above all knowing that it had very low, almost negative, assets and that it was funded with State resources," Borda told AFP.

Ueno offered cashback of up to 40% for using its card, so "it was very difficult to think that it had a profit margin," he added.

For Ferreira, "they probably did not have all the capital required for those investments." It considers that part of the expansion could have been financed with "loans to related companies" for amounts greater than those allowed.

The Central Bank initiated the resolution of Ueno on November 2 after determining that its solvency had fallen below half of the legal minimum. Operations were suspended and millions of clients lost access to their funds.

Political crisis

The collapse dragged down Peña, president since 2023 and who until 2025 had shares in the group that controlled the entity.

Peña is accused of injecting the bank with more than $800 million in public funds and hiding or minimizing its financial problems despite warnings about irregular loans and risks of insolvency.

He is also questioned for having appointed Carvallo, former director of Ueno, as head of the Central Bank, in a potential conflict of interest.

After losing the support of his Colorado Party (conservative), Peña was dismissed on Friday and was placed in preventive detention, accused of alleged breach of trust and administration for personal gain, crimes that could cost him up to 15 years in prison.

On Sunday, the prosecutor's office raided his residence in Peña. The indictment indicates that the former president received loans from Ueno for $500,000 to build it in 2024, with a monthly payment that was six times his salary.

Emergency measures

The government rushed measures to return deposits to small savers. An emergency law allowed advance payments of up to $18,000 per account, and as of Saturday, nearly 1.2 million customers had received their funds at other banks, according to authorities.

But large depositors will have to wait for the liquidation of assets or the recovery of Ueno credits, Ferreira explained.

The price of the dollar jumped 9.5% and the country risk rose from 125 to 143 basis points between November 2 and 5.

Uncertain future

Eight Ueno executives were arrested for alleged breach of trust and fraud, including its CEO Miguel Vázquez, owner of almost twenty companies in different sectors.

The blow is already being felt in commerce. The Association of Importers and Merchants of Paraguay reported drops of up to 70% in sales and difficulties in replacing merchandise and meeting commitments.

"There is going to be an economic impact," Ferreira warned, because in the face of these crises "people become very cautious, very conservative, they avoid expenses that are not strictly necessary and that obviously translates to consumption."

For Borda, "it is the biggest theft that was carried out in the entire history of the democratic era," although he considers that the rest of the banks remain solid and "people do not doubt the financial system."

© 2026 AFP

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