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WASHINGTON, USA -- The Inter-American Investment Corporation (IIC) is launching a new $80 million initiative for direct lending to small and medium-sized enterprises (SMEs) in Latin America and the Caribbean. The initiative will provide loans and technical assistance packages to help export-oriented SMEs meet emerging international best practices in corporate governance.

“SMEs with otherwise strong indicators often lag behind in areas such as transparency and legal reporting,” noted John Beckham, chief of the IIC’s Operations Division. “By integrating technical assistance into our loan operations, we give companies the tools to address these issues, enabling them to apply for additional IIC resources.”

The initiative targets primarily export-oriented SMEs, harnessing the IIC’s longstanding regional expertise. The loans will follow a fast-track approval procedure to cut processing times and increase responsiveness and will carry tenors of up to five years, providing SMEs access to highly-sought-after, long-term financing.

This new commitment comes in the context of a larger effort to target SMEs more directly and raise lending standards by integrating corporate governance improvements into IIC operations. The Corporation is a signatory of the Corporate Governance Development Framework, established in 2011 by 29 development finance institutions to promote corporate governance at companies in which they invest. As part of its activities, the IIC holds annual training workshops for SMEs in the region and runs a technical assistance program specifically geared to governance issues in family businesses.

Between 2010 and 2012, the IIC approved 50 direct loans to SMEs for a total of more than $63 million. The new initiative is expected to finance another 25 loans.

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