IDB calls on Latin America and the Caribbean to boost financing for SMEs

Inter-American Development Bank (IDB) President Luis Moreno has called on Latin America and the Caribbean to promote the development of small and medium-sized companies (SMEs) if the region is to make progress in its poverty reduction efforts.

“SMEs face a variety of barriers that prevent their growth, but most SMEs rate access to finance as the main obstacle,” said Moreno earlier this week during the opening of the XV Inter-American Forum on Microenterprise (Foromic 2012).

“Without diminishing our attention on financial inclusion and the micro level, there are a series of initiatives we are developing to promote the growth of SMEs through greater access to finance, markets and information resources,” Moreno added.

Foromic is the leading forum for exploring ways to support and finance microenterprises, small and medium-sized companies, and small farmers in Latin America and the Caribbean. The event, which for the first time is held in the English-Speaking Caribbean, was jointly organized by the IDB Group Multilateral Investment Fund (MIF), and the government of Barbados.

McKinsey & Company estimates that over 35 percent of the more than 1.1 million formal small and medium-sized enterprises in the region do not have access to credit, and the existing financing gap amounts to between US$125 billion and $155 billion.

Speaking to an audience of about 1,000 people, Moreno noted that the IDB, the MIF and the Inter-American Development Corporation have been supporting SME development through several programs ranging from capacity building for women entrepreneurs, technical assistance for financial institutions to better assess credit risk of SMEs, and investments in venture capital funds.

Barbados Prime Minister Freundel Stuart also participated in the opening ceremony. During his speech, Stuart stressed the importance of Foromic to stimulate entrepreneurship.

“Barbados, like many other countries around the world, is facing tough economic times,” he said. “One of the new columns in which the economy must be rebuilt is that of entrepreneurship of all levels. The relevance and importance of a forum at this time, therefore, cannot be overstated.”

 “Entrepreneurship is a powerful driver of both growth and poverty reduction, which is at the core of the MIF’s mandate,” said Nancy Lee, MIF's General Manager. “The theme of this year’s Foromic about unlocking entrepreneurship through innovative solutions reflects our shared challenges of giving entrepreneurs the tools they need to start and grow their businesses. Foromic has evolved as the region’s needs have evolved. Adding to our microcredit agenda, we also discuss savings, insurance, green finance, and innovative financial models for SMEs.
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Date Posted

October 05 2012