CAF seeks to promote the development of Guarantee Funds to improve access to credit by SME's

CAF, Development Bank of Latin America, and the Sociedad Administradora de Fondos de Inversión (SAFI Union) (Investment Funds Administrator) organized the Guarantee Funds International Forum in La Paz, Bolivia, to promote and encourage the development of funds in the national financial industry, to enable small and medium-sized enterprises (SME's) better access to financing. 

Emilio Uquillas, CAF's director Representative in Bolivia, explained "We want to strengthen SME's, as they generally meet obstacles trying to obtain financing due to their lack of guarantees. With these funds, enterprises may obtain financial resources to grow, generate employment, and produce goods and services for the internal market or for export, with a direct impact on the growth of the national economy.  

National and international experts from Colombia, Spain, Portugal and Uruguay participated in the event, sharing experiences and the benefits of the systems, associations, partnerships, and guarantee  funds existing in different countries.  

The Forum showed that Bolivia is experienced in the use of guarantee funds. To date, both the "Propyme Union" and the one created by the Productive Development Bank (BDP for its acronym in Spanish), enabled more than 5,600 micro, small, and medium-sized entrepreneurs (Mypimes, for its acronym in Spanish) in the country to have access to credit in the national financial system to develop activities in the productive, commercial, or services sector. 

Pablo Pombo, Spanish expert in the field of guarantee systems, explained that guarantee systems work when borrowers, financial systems, and funds, take the risk but also obtain a benefit. He stated that for these systems to be optimal and of quality in the coverage of credit risks, there must be a diagnosis, they must be regulated and, preferably, they must be supported by the public sector. 

Pombo highlighted the importance of supporting micro, small, and medium-sized enteprrises, as they represent 99 percent of the world entrepreneurial weave and are the main source of employment  and wealth generation in countries. 

At the same time, Uruguayan expert Alvaro Garcia also informed that the financial institution created the Latin American Guarantees Fund (FLAG, for its acronym in Spanish), which seeks to strengthen the region's guarantee funds and become a fiduciary fund managed by CAF, with the initial participation of five countries: Argentina, Bolivia, Ecuador, Peru and Uruguay).