the mif blog

Stories of inspiring entrepreneurs and organizations, discussion and commentary of new trends in private sector development, and the latest events and publications.

SME finance – it’s not all about banks and microfinance institutions!

By Tetsuro Narita

When we talk about access to financial products and services for small and growing businesses, we put commercial banks at center stage and try to find ways to overcome such businesses’ lack of credit history and collateral. When we emphasize the importance of so-called “vulnerable” populations building up savings for rainy days or future investment opportunities, we generally identify (regulated, therefore deposit-taking) microfinance institutions as the most appropriate counterparts, based on their social missions and capillarity.

Preparing to enter new markets: what commercial banks can learn from successful entrepreneurs

By Tetsuro Narita

By Tetsuro Narita, Topic Lead of the Innovative Models for Small Business Finance Team of the Access to Finance Unit at the Multilateral Investment Fund, member of the Inter-American Development Bank Group.

At a recent workshop I attended in Nicaragua, we were shown a video of a “pulpero,” or small shop owner, testifying to the benefits of a new cell phone-based financial service for entrepreneurs. When asked to list his top three factors for success in business, he responded: (1) Give thanks to God; (2) Have dreams; and (3) Know exactly what you are doing. His first item seems to be good advice for most situations, and the second two factors are relevant not only to a humble pulpero, but to any business of any size, especially one seeking to tap into a new market segment.

Banks seem eager to reach more SMEs – but how?

By Tetsuro Narita

At noon on a Sunday in Lima, more than 170 bankers from the Latin American and Caribbean region were in a conference room to attend a panel discussion on a new risk analysis tool for small and medium enterprises (SMEs), resisting the temptation to go out and enjoy fine Peruvian cuisine. It was encouraging.

The panel discussion, titled “Revolutionizing the financing of small and medium sized enterprises: The decision of banks to base their risk analysis on psychometric parameters,” was organized by the Multilateral Investment Fund (MIF) and the Financial Markets Division of the Structured and Corporate Finance Department of the IDB Group, as a part of theXLVI Annual Assembly of the Federation of Latin American Banks (FELABAN), held November 17-20, Lima.