Opportunities for the Majority

The tide that lifts only luxury yachts is of very little use. All boats must be lifted at the same time.

From the development standpoint, when a majority gets only a trickle from the economic torrent, all ships run the risk to sinking.

For the Inter-American Development Bank providing opportunities for the majority of society constitutes an urgent priority.

And to achieve this goal, it’s fundamental that hundreds of million of Latin Americans have access to the financial system, especially small and micro-businesses. It’s also critical that they are provided basic services and opportunities to participate in the economy.

Luis Alberto Moreno, President, IDB - 1:14:09: (Translation) “I think the most expensive kind of credit is the one that is not given. When a person applies for credit and it’s denied, he or she ends up in the hands of a predatory lender. I know that interest rates are expensive, and they are expensive because the overhead costs are high. But the more competition there is in the micro-finances field, the faster the costs will fall down.”

Including micro-entrepreneurs in the economy is a great challenge, among many reasons because of the lack of a financial culture among millions of potential loan recipients.

Anna Cabral, Treasurer, USA  - 00:12:06 “It’s absolutely clear that one of the key elements...”00:12:34 (Quick out) “…something that is much more secure.”

In its new stage as the most relevant financial institution in the region, the IDB is determined to push hard for this sector of the economy, and it’s making a special effort for small businesses.

Darville again - 4:02:53 “Banks finance big companies, and there is a lot of financial backing for micro-businesses, but truth is, for small businesses, the actual engine of any economy, there is very little financing available.”

To fulfill these goals, the IDB has established a program called Opportunities for the Majority —an initiative that promotes and finances new business models that allow for the participation of the private sector, local governments and communities at large.

This majority constitutes 70 percent of the region’s population, that is 360 million people with incomes lower than 300 dollar a month. The goal is for this population to participate in the economy as providers, co-creators of products and services, and users of services that improve their quality of life.

For them, the Bank has created alliances with business partners for whom it has provided medium- and long-term loans, loan warranties and technical assistance.

In the end, the aim is for this economic torrent to lift the highest number of boats.