Initiative to foster internationalization of domestic companies from 13 regions of Peru

CAF—development bank of Latin America—signed a technical cooperation agreement with Peru’s Exporters Association (ADEX) in order to promote the internationalization of micro, small and medium-sized enterprises (MSMEs) in 13 regions of the country.

This initiative is part of the commitment of both institutions to promote projects on foreign trade, internationalization of companies, creation of business opportunities for domestic products and identification of foreign investment opportunities to favor domestic entrepreneurship.

This will include extensive dissemination, implementation and monitoring of the Internationalization Support Program (ISP) that provides non-reimbursable co-financing to companies to carry out activities that help diversify markets and favor the entry of Peruvian products and services into other countries. The implementation of this convention will also be led by the Ministry of Foreign Trade and Tourism (MINCETUR), which has been working on different programs, tools and instruments to reinvigorate the business sector.

The technical cooperation agreement was signed by Luis Carranza Ugarte, executive president of CAF, and Juan Varilias Velásquez, president of ADEX, at the CAF offices in Lima. MSMEs account for 99.6% of companies in Peru.

In the export sector, 75% of exporting companies are MSMEs and the value exported accounts for only 5% of all sectors. They also create about 7.7 million jobs, and contribute to 21.6% of domestic production.

However, their prospects of growing sustainably, developing innovation or boosting productivity is very low, often due to the lack of information and financial resources for the issues identified, inadequate management, lack of qualified and trained personnel, as well as low development of value-added products and few resources for marketing, in addition to the difficulty in finding potential customers or business partners.

“With this agreement, CAF seeks to support activities that contribute to Peru’s economic diversification, but also boost productivity, innovation and business internationalization in order to increase exports of Peruvian value-added products to other markets, and thus ensure the sustainable growth of businesses and the country,” said Carranza Ugarte.

In addition, Varilias Velásquez highlighted the joint work of his association and CAF to empower small businesses characterized by their high impact in job creation. “This will improve their competitiveness and reduce liquidation rates,” he said.

Varilias stated that according to ADEX statistics, of 7,239 companies, 4,944 exported small amounts, accounting for 68% of the 2016 total. He also noted that the number of micro-enterprises decreased by 4% (down from 3,839 to 3,676), while the number of small enterprises grew 0.4% (from 1,263 to 1,268).