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Latin America and the Caribbean 2019

Policies for Competitive SMEs in the Pacific Alliance and Participating South American countries

image of Latin America and the Caribbean 2019

The SME Policy Index is a benchmarking tool that assists emerging economies in monitoring and evaluating progress in policies that support small and medium-sized enterprises. This first application of the Index methodology in the Latin American and Caribbean region covers the four Pacific Alliance member countries (Chile, Colombia, Mexico, Peru) and three participating South American countries (Argentina, Ecuador, Uruguay). Divided into seven policy dimensions, this report assesses the strengths and weaknesses that exist in different areas of SME policy design, implementation, and monitoring and evaluation, and provides guidance to policy makers in identifying policy areas for future reform according to international good practices. This report is a joint effort between the Development Bank of Latin America (CAF) and the OECD through its Latin America and the Caribbean Regional Programme (LACRP), in co-operation with the Latin American and Caribbean Economic System (SELA) and the “Foundation for the Strategic Analysis and Development of the SME” (FAEDPYME).

English Also available in: Spanish

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Access to finance (Dimension 3)

Ensuring access to credit is critical to enable SMEs to innovate and grow to their optimal size. However, SMEs lack access to finance due to the acute information problems, higher transaction costs and limited financial knowledge that characterize them. Government and private organisations can improve SMEs’ access to sources of credit by providing prudential regulation, facilitating access to information, resolving market failures and addressing existing knowledge gaps. This chapter addresses these issues and finds that the region has a moderately advanced level of policy development with an average of 3.77 points. The region’s major challenges in this area concern financial education strategies for SMEs and the refinement of legal procedures for dealing with bankruptcy.

English Also available in: Spanish

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