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III INTER-AMERICAN FORUM ON MICROENTERPRISE, Barcelona 2000

III FORO

III FORUM ON MICROENTERPRISE
"Building Partnership for Microenterprise Development"
Barcelona, Spain - October 17-19, 2000

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Introduction

The III Microenterprise Inter-American Forum was a four-day meeting celebrated on October the 17th to the 20th, 2000, in which microenterprise service providers from Latin America, the Caribbean and Europe, NGOs and government representatives took part. The III Forum was a unique opportunity for alliances and cooperation among NGOs and private and public sectors. The III Forum also provided the ideal setting to let these institutions be introduced to new approaches on lending services in their sector, share experiences and gather information on the latest available tools for the development of institutions and to broaden their relationship with similar institutions, donors and private sector entities.

Background
Although in the last ten years Latin America and the Caribbean have taken a big step ahead by improving the access to financial services and to microenterprise business development services, it is estimated that only less than 10% of the sector in this area is properly attended. Important financial resources and technological improvement is still required to fill the gap between the supply and the demand of such services. Although international donors -and specially the European- play an important role in financing microenterprise programs, those lending service organizations shall have to find a way to increase the share of private capital. Unless they improve their capacity to offer first-rate, efficient and effective finance and development business services -taking into account the cost for the sector- one cannot expect any important increase in finance.


20 years of IDB side by side with microenterprises

*Since its foundation, the Inter-American Development Bank has supported micro- and small enterprise. We were the first multilateral institution in financing private sector institutions that supported micro- and small enterprise. Today, we have developed a wide variety of tools to support the development of this sector.
*Microenterprise is not a phenomena alternative to economy. Microenterprise is the essential nucleus of economic activities, and a part of the everyday life of most Latin American and Caribbean workers and businessmen.
*By mid-90's, microenterprises were about 50% of the employment sources in Latin America. In other words, more than 150 million people make their living through microenterprise, and half of them are women. They work in both urban and country areas, and in all economic sectors.
*Why does an institution such as the IDB invest in microenterprise development? Investments in microenterprise development may:
*Reduce poverty through profitable activities
* Promote employment
* Contribute to the national income and economic growth
* Improve income distribution
* Reassure civil society
* Develop private sector, and
* Promote a business spirit.

As a result of our long experience in the microenterprise sector, we have learned some lessons, which have allowed us to respond in a more efficient way to the present day challenges in this sector. Among them:
* Diversity: different microenterprises that require different services at different times.
* The successful business development programs provide with a number of limited services/products.
* Business development services -either social or community- are as important as finance services for poor businessmen in a microenterprise.
* The politically regulated setting plays a very important role.
* Institutional capacity and sustainability is essential to support microenterprise.
* Trading companies with a profit motive in mind can provide services that favour poor businessmen in a microenterprise.
* NGOs (with no profit motive in mind) can become an effective service provider for microenterprise when operating from a business frame of mind.

Conctact us at: Foromic@iadb.org

Last updated: 06/13/07