Small and medium-sized enterprises in Latin America and the Caribbean last year received financing totaling $150 million for 25 projects from the Inter-American Investment Corporation (IIC).
According to the IIC's recently published 1997 Annual Report, 40 percent of the funds approved were for equity investments, and 60 percent for loans. Seven of the equity investments went to new or existing country or regional investment funds, according to the report, which will be presented to the IIC's Board of Governors at its annual meeting March 17 in Cartagena, Colombia.
The IIC's lending operations last year also had an important catalytic effect through cofinancing. These operations used $33 million of the Corporation's own resources to mobilize a total of $25 million in funding from banks and other third parties.
Among other developments last year were the following:
--Increase in the Corporation's membership to 35 countries with the entry of Denmark. Discussions on IIC membership were also conducted with six other countries.
--Creation of a database on small and medium-sized enterprises in Latin America and the Caribbean.
--Provision of advisory services to the Emerging Markets Partnership, which set up a $1 billion fund to invest in infrastructure projects in Latin America.
--Approval of a $300 million idb loan to the iic to increase the supply of credit to small and medium-sized businesses.
LONG-TERM COMMITMENT
Reviewing the region's economic landscape, the Annual Report finds that the burgeoning flow of direct and institutional investment has largely bypassed small and medium-sized companies. Given the importance of these firms for Latin America's economic output and job creation, the region's ability to sustain its growth will depend on a ready supply of private investment that is willing to commit to the long term.
The Inter-American Investment Corporation, which began operations in 1989 with a capital base of $200 million, by the end of 1997 had leveraged that capital to finance or mobilize financing for projects with a total cost of $3 billion.