Lack of access to financing, or access under disadvantageous terms, is one of the main barriers faced by SMEs in Latin America and the Caribbean. in fact, one in three SMEs in the region reports restrictions on access to credit. 

This hindered access to funding is particularly relevant as it negatively affects growth and productivity. About one-fifth of SMEs in Latin America and the Caribbean claim that lack of access to financing is the main constraint to their growth. 

In order to bridge the gaps in access to financing in the region, CAF acts as a second-tier bank, granting credit lines to development financial institutions and private commercial banks, so that they can then provide financing to SMEs.  

Contribution in numbers

These lines of credit aimed to fund short-term operations, mainly to finance working capital and carry out foreign trade operations. According to available evidence, this type of funding allows SMEs to:

     - buy more inputs (+14%)

     - produce more (+6%)

     - create more jobs (between 4% and 24%)

     - export more (+40%)

Each SME benefiting from a CAF credit line would have created an estimated 13 new jobs.

In addition to credit lines, CAF has developed a product of partial guarantees for SMEs, aimed at financial intermediaries. Thus, it assumes part of the risk associated with a loan granted to an SME. This instrument complements the offerings of national guarantee funds and systems in the countries of the region

Available studies show that access to these partial guarantees increases the probability for SMEs to access credit, the amount of the loan they receive (17%), research and development expenditures (8%), investment in fixed assets (6%), production (6%), employment (4%–17%) and even total factor productivity (5%).  

​In addition, CAF provides specific non-financial support through technical cooperation funds. These funds include consulting and training programs in innovation, exports, financial inclusion and digital transformation. 

Credit lines granted to development financial institutions and private commercial banks, as well as guarantees and technical cooperation funds, have a significant impact on SME employment and production. The ultimate goal of supporting SMEs is to increase their productivity and, as a result, boost regional productivity.