Even though small and medium-sized businesses constitute a significant segment of the lending market in Latin America, the credit potential of these firms has long been neglected. Today, encouraging such businesses to make greater use of banking services and become more attractive borrowers is essential to expanding the region's banking industry.
Expanding Access to Financial Services in Latin America examines how macroeconomic conditions and adjustment processes have affected efforts to incorporate small businesses into national financial systems. Constraints include restrictive monetary policies, inflation and high interest rates, as well as the informal and under-capitalized nature of a sector traditionally excluded from access to banking services.
Policy recommendations from case studies on Argentina, Chile, Guatemala, Peru and Uruguay point to the importance of market-based allocation tools and a growing role of nongovernmental organizations at different levels of the credit management process.
About the Author
Miguel Basch and Camilo Morales are economists with the faculty of economic and administrative science at the University of Chile in Santiago.