Unlocking MSMEs potential in LATIN AMERICA and the CARIBBEAN

Small and medium-sized enterprise (SME) development is critical for broad-based and sustained economic growth as Latin America and the Caribbean (LAC) grapple with ongoing global shocks following two years of pandemic-related fiscal challenges. SMEs are a primary source of job creation, comprising 99.5 percent of firms in the region, and accounting for 60 percent of employment.¹ Yet, these same firms represent only 20 percent of gross domestic product (GDP), due to constraints spanning financial to productivity issues. Helping SMEs both overcome growth constraints and provide higher-quality jobs is important in the context of today’s disparate and fragile economic recovery. SMEs are particularly vulnerable to inflation and labor-market weaknesses from scarcity to informality. With risks of lasting consequences still present, returning to pre-pandemic levels of output is insufficient for the economy in general, and for SMEs.
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