In Colombia, microenterprises and SMEs (MSMEs) represent an important part of the economy, employing 80.8% of the country’s workforce, contributing to 40% of GDP and representing 13% of total exports.The estimates about the employment contribution of MSMEs and their share in the total number of establishments are based on the Economic Census of 2005, the latest available in Colombia. The participation of MSMEs in the GDP is inferred from an estimate of the Association of Micro and Small Entrepreneurs (ACOPI). The estimates about MSMEs’ contribution to exports are based on a 2003 study by FUNDES. However, there exist large differences within the MSME sector, particularly between medium-sized firms, on the one hand, and micro and small enterprises on the other. These latter, which account for about 68% of the business population, tend to be more vulnerable and less affected by policy instruments. Also, informality is common and formalisation is constrained by the family nature of the businesses, which are typically limited in their managerial capacity and corporate governance.