Resources for Small Businesses

The Multilateral Investment Fund (MIF), part of the Inter-American Development Bank (IDB) Group, is the largest provider of grants for improving the competitiveness of micro and small enterprises in Latin America and the Caribbean (LAC).

MIF is also the largest supporter of microfinance in the region, having promoted modern technology, new management methods, and innovative products and services that have made the industry the most efficient and fastest growing in the world.

MIF does not directly invest in companies, but can leverage a variety of innovative financial instruments. MIF can work with partners in the private and public sectors, in civil society, and in national and regional projects in virtually any sector.

In general, MIF assistance aims to improve the capacities of small and microenterprises through projects in enterprise development, to expand access to finance and the financial system, through projects in financial democracy, and to improve the business environment.

Community, Research and Communication

Several non-financial instruments contribute to the promotion and strengthening of small businesses, such as the Inter-American Microenterprise Forum (Foromic) and the knowledge platform MicAmericas. Microscope and Microfinance Americas 100, both studies and analysis sponsored by MIF, are also considered products of global excellence.

Doing Business with the IDB Group
See more information about available financing opportunities for micro and small enterprises and microfinance institutions.

Microenterprise and Microfinance in Numbers

70 million microenterprises representing the main source of employment for the region

More than 100 million people work in businesses with up to 5 employees. This represents about half of total employment.

A US$ 11 BILLION OF MICROLOANS

This is the size of the portfolio in Latin America and the Caribbean. In 2001, the total sum was US$ 1.1 billion, 10 times less.

AN ESTIMATED 650 MICROFINANCE INSTITUTIONS FOR 9,5 MILLION CLIENTS

Regulated microfinance institutions, a third of the total number, provide services to more than half of clients.

CLOSE TO US$ 1 BILLION IN INVESTMENT, GRANTS AND CREDIT

Since the late 1970s the IDB Group has financed microenterprises and the microfinance industry through direct investment, grants, loans and, increasingly, placements in private investment funds.

Sources: MIF (2009).

Financial Instruments

Working with local partners from the private sector, civil society and governments, MIF has financed the growth of innovative and inclusive businesses in Latin America and the Caribbean with significant contributions and investments .

The instruments that MIF has available are:

GRANTS AND LOANS

Line of Activity for Promoting Small-Enterprise Financing (LASEF) , provides technical assistance and training to increase the capacity of financial institutions to reach small enterprises.
Line of Activity for Strengthening of Microfinance Institutions , provides resources to institutions that develop products, improve their operative abilities and introduce technology in order to offer improved financial services to microenterprises.
Social Entrepreneurship Program (SEP) , supports the integration of rural businesses to value chains and markets, as well as support to private alternative providers in the areas of education, health, water, and energy, among others.
The Rating Fund II , co-finances the contracting of rating services for microfinance institutions.

DIRECT AND INDIRECT INVESTMENT

The MIF is a primary source for direct and indirect investment for financial institutions that provide loans, investment capital and technical assistance to microenterprises and entrepreneurs in Latin America and the Caribbean.

The Inter-American Investment Corporation (IIC) a part of the IDB Group, was one of the first development institutions to invest directly in the equity of a microfinance institution in early 1990s. Today, MIF is the lead IDB direct investor with equity participation in institutions such as Financiera Calpiá (today Banco Procedit El Salvador), Credifactor (Nicaragua) and Microfin (Uruguay).

Indirect investment has taken place thorough the following broad categories:

Funds, such as the Microfinance Growth Fund (MiGroF) and the Emergency Liquidity Facility (ELF) , which targets institutions affected by financial crises of natural disasters.
Private sector instruments with different levels of sophistication and reach, such as funds in local currency (LOCFUND) , for subordinated debt (Solidus) , for micro insurance (Paralife) , and the development of microfinance institutions (Global Partnerships Microfinance Fund 2006 and 2008 , AIM, LA-CIF , Profund International and ACCION Gateway Fund ), among others.