In recent decades, LATAM has achieved significant overall economic and social progress. In Latin America there are a large number of micro-enterprises at one end and some large enterprises at the other end, but, in the middle, just a few bunch of companies operate under the category of small and medium-sized companies (SMEs), so the contribution of the SME segment to the national economy and employment are not so significant. Why those companies are not evolving? One of the main reasons is related to funding, those companies that are too large for microfinance (the small size of these loans limits the scope as loan size is too small for expanding the business), and too small or risky for banks or private equity firms are at risk of disappearing.
Impact investing has the potential to drive and leverage innovations that address these challenges. To this end, we must create a financial environment that favors value-based entrepreneurship and fosters innovations through the correct allocation of capital, as well as emphasize the importance and value of collaborative work between organizations.
