Four ways technology and data facilitate SME finance in Latin America & the Caribbean


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* By Greg Da Re

Technology, particularly the Internet, allows SMEs to share experiences, connect to different networks and operate in a world without the limitation of geographical barriers. Social networks are increasingly important for companies to position their brands. Social media in Latin America will near 300 million users by 2017. Technology can allow SMEs to increase their competitiveness and facilitate new ways to access financing.

MIF_woman entrepreneur_compressedThe Inter-American Investment Corporation (IIC—the private sector arm of the Inter-American Development Bank dedicated to SME finance) deploys new technologies to engage with our SME clients in Latin America and the Caribbean (LAC). I offer four examples of how the IIC utilizes innovative, technology-based initiatives designed to facilitate SME finance:

1. Connect Americas

ConnectAmericas is the first social network for businesses in the Americas dedicated to promoting foreign trade and international investment. Developed by the IDB, it supports SMEs to strengthen their businesses, providing access to communities of clients, suppliers and investors in the region and globally, segmented by industry. It provides simple information about procedures and regulations for international commerce and highlights financing opportunities. Since it launched in March 2014, ConnectAmericas has over 6,550 registered users and 30,000 visitors.

2. FINPYME e-Learning Tools

For the past 10 years, the IIC has trained thousands of SMEs in the region through workshops and seminars under our FINPYME program. Today, though, we’re in an era of MOOCs—Massive Open Online Courses. New technology platforms for e-Learning offer the opportunity to dramatically expand the reach of high-quality training. According to The Research Institute of America, e-Learning has the power to increase information retention rates by up to 60% because the student has control over the learning process and an opportunity to revisit material as needed. The IIC is transitioning much of our learning content online. Today, the IIC offers five free e-Learning MOOC-style courses within ConnectAmericas related to SME competitiveness.

3. InvestAmericas

InvestAmericas is a recently launched dynamic online platform. It facilitates the flow of capital to LAC by simplifying the due diligence process between potential investors and enterprises.  An investor using InvestAmericas will have access to a network including: an active pipeline of debt and equity investment opportunities, a streamlined due diligence process (i.e., access to local third-party service providers and built-in due diligence templates), and connection with other users in the platform to explore co-financing opportunities. InvestAmericas is currently commencing operations in Costa Rica and will be subsequently rolled out to Colombia, Trinidad and Tobago, and Uruguay as pilot countries. Over 2015, InvestAmericas will be available in all countries where the IIC operates.

4. Online Business Tools

In 2008 the IIC started its FINPYME Diagnostics program which provides companies with an objective review of their current competitive position, a sort of health checkup for business. Armed with this information, businesses can focus on strengthening areas of weakness in order to become more effective, efficient, and ultimately attractive to investors.  In 2013, the IIC moved to an online self-assessment tool, the first of a series of self-assessments for SMEs that we are developing. The IIC sees great value in online tools and platforms in order to impact far more SMEs than traditional methods alone, such as workshops and seminars. As a small institution, this shift is critical for us to achieve scale in our operations.

Big data and technology enable financial institutions to better make decisions by understanding the behavior of clients, how they communicate, their preferences and knowledge gaps. As we continue to accumulate data and information, we will be able to formulate new and improved products and services to better suit their needs all while contributing to a stronger SME ecosystem.


About the author: 

Greg Da Re is Chief of Strategy and Innovation Division at Inter-American Investment Corporation (IIC). He has worked at IIC for the past 10 years supporting its mission to expand its capacity to offer financing and other assistance to SMEs in the Latin America and Caribbean region. Within the IIC, Greg is responsible for the IIC’s strategic planning and innovation agendas, which include developing the IIC’s business strategy as well as designing and overseeing the launch of new innovative programs and services such as the InvestAmericas platform and the IIC’s online knowledge and learning content.

A version of this post was originally published on the SME Finance Forum

Last modified: Septiembre 12, 2016

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