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IDB’s Moreno says SMEs key to promote inclusive and sustainable growth in Latin America

Foromic will explore growth potential for micro and small enterprise, especially women’s businesses

SAN JOSÉ, Costa Rica – The creation of economic opportunities for the poor must be at the cornerstone of policies to improve citizen security and promote inclusive growth in Latin America, said IDB President Luis Alberto Moreno during the XIV Inter-American Forum on Microenterprise (Foromic 2011) organized by the Multilateral Investment Fund (MIF), a member of the IDB Group.

Moreno, speaking to an audience of more than 1,000 people, said the development and growth of more productive micro, small and medium-sized companies is a powerful agent for fighting poverty and reducing informality and insecurity in the region. He praised the region’s recent strides in advancing women’s participation in society, labor markets and politics, noting more needs to be done to promote gender equality because women-led businesses are critical for poverty reduction.

“Micro, small and medium-sized enterprises are an important source of job creation and long-term innovative growth and have the potential to become the source of inclusive and sustainable growth,” said Moreno during Foromic ’s inauguration, at which Costa Rica’s President Laura Chinchilla was also present.

Moreno said that in order to create greater economic opportunities, the microfinance industry must expand into rural areas, invest in innovation and increase access to finance, savings and communication and information technologies. Growth in businesses beyond the micro level is key, and a priority is financing small and medium-sized businesses, particularly those headed by women.

During her speech, Chinchilla said the region needs policies to reduce the vulnerability and increase productivity of micro, small and medium-sized companies, which account for about 90 percent of all companies in the region.

“We are committed to creating a political, social, and financial environment and capacity building that are more effective, accessible, coordinated and relevant to microenterprises,” Chinchilla said.

Foromic, the most important annual microfinance and microenterprise development event in Latin America and the Caribbean, will continue through October 12th. It is organized by the MIF in collaboration with Costa Rica’s Ministry for Economy, Industry, and Trade and the Ministry of Finance.

New MIF Projects

The MIF also announced seven new projects it will finance in the region. “These projects demonstrate our commitment to finding innovative solutions for promoting economic development throughout the region, specifically with women entrepreneurs and in rural areas,” said Nancy Lee, MIF's General Manager.

The MIF will help develop new small business ventures in Central America, foster the competitiveness of micro and small companies in rural areas of Costa Rica and support innovative credit risk assessment tools that expand financing access to SME borrowers, including women entrepreneurs.

It will provide nearly US$7 million in financing for three projects to increase and improve the offering of microfinance services to microentrepreneurs and small farmers in rural areas in Honduras, Guatemala, Costa Rica, and Nicaragua. The project contracts were signed earlier today by IDB President Moreno.

During the inauguration, Moreno delivered the Inter-American Awards for Microenterprise Development. Banco FIE S.A. of Bolivia, FFM Popayán, a non-governmental organization from Colombia, and CABEXSE, a Bolivian export association, won this year’s awards for their excellence in providing support to microenterprises in Latin America and the Caribbean.

Citi Foundation, which sponsors Foromic, delivered this afternoon the award for excellence in local entrepreneurship to Artesanías Diprok, a wood crafts maker, for its entrepreneurial spirit, success in growing its business, and commitment to community development.

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