<p>This paper investigates how shocks to banks’ willingness or ability to extend credit in dollars affect credit growth for Peruvian firms, across firm size categories. Using a comprehensive bank-firm credit registry from 2010 to 2024, merged with firm-level information from the Peruvian Tax Authority’s Padrón dataset, we identify monthly, bank-specific shocks by isolating unanticipated changes in the share of loans in foreign currency over total credit. We then measure each firm’s exposure to these supply shocks. Our results show that positive supply shocks to the composition of credit toward foreign currency significantly reduce total credit growth for large, small, and micro enterprises, increase it for medium-sized firms, while leaving corporate firms unaffected. We also find evidence of substitution toward local currency credit, particularly strong among corporate and large firms. In addition, these shocks are associated with an increase in non-performing loans among microenterprises especially during periods of financial stress such as the Covid-19 pandemic. The findings suggest that financial dollarization acts as a channel for credit segmentation, underscoring the need for targeted macroprudential policies to enhance financial stability in dollarized economies.</p>