On the outskirts of Lima, Lucy García, a BBVAMF entrepreneur, runs one of the micro-enterprises that, when combined with medium-sized ones, generate six out of every 10 jobs in the country, according to the Peruvian Ministry of Production. Lucy employs some 200 people, thanks to the network of motorcycle-taxis she manages, along with a small mechanical repair-shop.
The United Nations regularly publish their data, yet relatively few people know that the MSMEs (micro, small and medium-sized enterprises) account for more than 90% of businesses, generating between 60% and 70% of employment and producing approximately 50% of Gross Domestic Product worldwide. They also make a significant contribution towards achieving the 2030 Agenda for Sustainable Development, above all the goal of promoting decent economic growth (SDG 8) as well as the one relating to innovation and sustainable industrialization (SDG 9).
In Latin America, although MSMEs are responsible for regionally creating over half the employment and for 28% of the GDP, the growth of the sector is curtailed by firms’ short life spans. Their ability to survive is hampered by lack of access to new technologies, in many cases due to insufficient funding.
This is where BBVA Microfinance Foundation comes in. Aware of the crucial role that micro-enterprises play in both economic and social growth, it promotes sustainable development for low-income entrepreneurs, offering them access to financial products. This breathes new life into the MSME ecosystem, the very backbone of the Latin-American economy.
“The growth of the sector is curtailed by firms’ short life spans. Their ability to survive is hampered by lack of access to new technologies, in many cases due to insufficient funding.”
Over 3,000 kilometers away from Lucy, across the border in the Dominican Republic, Pedro and Sylvia, also BBVAMF entrepreneurs, are part of the almost 1.5 million people who run an MSME in the country, according to the Ministry of Industry, Trade & MSMEs. They not only seek financial or economic sustainability. Pedro’s business is targeted at taking care of the environment by promoting the use of organic fertilizer, and Sylvia’s tackles a problem with invasive lilies that act as parasites on the local flora and fauna in the rivers. She harvests them herself, and then uses them as raw material in manufacturing her craftwork.
In Chile, a BBVA Research report shows that there are now more female entrepreneurs than female employees. An example of this is Vilma Leyton, who took out a small loan. She lives in the north of the country, where she cuts and sews traditional costumes in order to provide for her family. It has made all the difference because now, all her children are studying at university. Supporting women like her truly has a long-term impact. The following generations of Leytons will continue to benefit from the education she was able to give them.
As will the future generations of over twenty families living off Doña Julia’s restaurant in Panama, popular among the locals for the quality of the food and the excellent service. This small business, set up with microloans from the Foundation, is just one of over 60,000 MSMEs in the country, according to AMPYME.
All over Latin America –in Peru, the Dominican Republic, Panama and Colombia (where the national statistics office puts 35% of GDP down to the MSMEs) – these kinds of enterprise are essential in generating jobs, fostering creativity and nurturing progress throughout the region. The United Nations recently celebrated the Micro, Small and Medium Enterprises Day, and the BBVA Microfinance Foundation also joined in paying tribute to MSMEs. Through its mission, it continues to help strengthen this economic pillar- important to promote the development of people, communities and countries.