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Unlocking SME growth
16 February 2010
James Prusky and Robert Klein, principals at Crecera Finance Company, discuss the role of trade finance in unlocking growth in the Latin American SME market.
Read more:
SME trade finance
Latin America SMEs
Crecera
IADB SMEs
SME trade finance fund
The global financial crisis has made the economic environment challenging for all business sectors in Latin America, but none have been more acutely affected than the small and medium sized enterprises of the region, or SMEs. These businesses generally include companies that have less than 250 employees, and sales of $20 million to $100 million per year. Additionally, given Latin America’s natural proclivity towards commodity exports, many of these SMEs are commodity and agricultural producers who rely heavily on trade finance lines, and thus are even more vulnerable.
SMEs in Latin America, generally individual or family-owned businesses, have traditionally had a difficult time accessing regular and reliable trade finance lines. This is because they may lack the balance sheet and third-party auditing that allows banks to easily apply standard credit models to their lending decisions.
When liquidity is plentiful, these companies often receive financing from local and international banks,...
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