Research shows that investing and enabling micro, small and medium-sized enterprises (MSMEs) to fulfill their development potential can have significant contributions to 60% of the SDG targets, including those related to goals SDG 8 (Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all) and SDG 9 (Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation), among others.
Thus, investing in and supporting the sustainability of MSMEs in the region as an integral part of the sustainability efforts of clients, can yield significant progress towards an economy that works for all.
The MSME Enviroment
For most large firms in Latin America and the Caribbean, MSMEs represent an important client segment or a large share of stakeholders in their value chain —be it as suppliers, distributors, retailers, etc.
In the region, MSMEs represent the lion’s share of businesses and employment, as they represent 99% of businesses and 67% of employment. Therefore, they are among the strongest drivers of economic development. However, despite their potential, MSMEs in the region tend to stay small and are significantly less productive than large firms.
One of the biggest challenges for MSMEs is the lack of accessible, adequate, and affordable financing that prevent them from growing, increasing productivity and competitiveness, and from investing in innovation —including their capacity to embrace digital solutions—. Another challenge relates to SMEs' capacity to adopt sustainable practices increasingly requested by large firms as they seek greater transparency and accountability in their own sustainability efforts. SMEs don’t always have the relevant knowledge, human resources, or financial capacity to invest in these issues, risking their competitiveness and integration into larger regional or global value chains.
We believe that by adopting sustainable practices, models and mindsets, these companies will be better placed to drive innovation, deepen markets, enhance competitiveness, strengthen supply chain resilience, and diversify their sources of investment. Now more than ever, the need for companies to have solid sustainable business models has become evident as it determines the resilience and likelihood of survival to economic shocks, especially in its value chain, while addressing inter-linked and material challenges around climate change, social inclusion, and prosperity as a whole.
Our commitment is to ensure clients integrate and offer solutions to MSMEs allowing them to thrive while driving long-term value for them and their stakeholders through a sustainability lens. IDB Invest is the ideal link to foster coherence and ambition in addressing the interlinkages and integrated nature of the SDGs working towards prosperity, social inclusion, and a healthy planet.
Through our advisory services on sustainability and MSMEs, we aim to support clients in enhancing their inclusive and sustainable business practices, models, and mindsets; we drive and scale up the business’ impact and meaningful contributions to the Sustainable Development Goals (SDGs). IDB Invest focuses on material sustainability aspects for our clients to maximize impact and transition to business models that generate value for society.
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Paula leads the Sustainability and MSMEs Team at IDB Invest, which she joined in 2019. She is responsible for the intersection of private sector and sustainable development.
Before joining the IDB Group, she led the United Nations Development Programme (UNDP) Business Call to Action, a global platform that promotes inclusive businesses and their contribution to the Sustainable Development Goals (SDGs). Paula previously worked at Business for Social Responsibility (BSR) in New York, where she provided advice to global corporations on topics including responsible sourcing, human rights, and sustainability strategy. She worked with CARE Canada and the Aga Khan Foundation in the development of value chains, impact investments, and microfinance.
Paula earned a master’s degree in environmental studies from York University (Canada) and a professional degree in industrial engineering from Universidad de los Andes (Colombia).
Phone number: +1 (202) 623-3648