In Latin America and the Caribbean (LAC), Micro, Small, and Medium Enterprises (MSMEs) account for 99.5% of all businesses and generate nearly 60% of formal productive employment. Within this ecosystem, 49% of women have started their businesses, driven mainly by the need to generate higher income (72%), achieve economic independence (39%), and save for a specific goal (37%).

Although MSMEs represent much of the business fabric in LAC and make a significant contribution to employment, their productivity levels remain low. Their contribution to the regional gross domestic product (GDP) is only around 25%.

The challenges faced by MSMEs in the region include the need to boost productivity in the smallest economic units, reduce gaps between businesses based on size, promote networks and partnerships that drive innovation and market access, and close gender gaps—since women continue to face multiple barriers that hinder the consolidation and growth of their businesses.

Latin America and the Caribbean: A Laboratory of Solutions

Over the past five years, the value chain landscape in the region has undergone profound changes. The pandemic, the impacts of the climate crisis, accelerating technological change, and geopolitical fragmentation have tested the resilience of productive ecosystems. In this challenging context, MSMEs have been forced to strengthen their ability to be resilient in the face of multiple crises, while also emerging as key actors in building more sustainable and cohesive economies.

At the same time, the region has become a true laboratory of policies, models, and partnerships for the development of resilient MSMEs. From digital transformation programs in rural areas to inclusive public procurement initiatives in border territories, UNDP is mapping, systematizing, and transferring solutions that are making a difference.

For example, through the Inclusive Value Chains Programme and in collaboration with local governments, decentralized cooperation, and key territorial actors, various initiatives are being promoted. These experiences are generating valuable lessons that are already being adapted to other global contexts, from the Balkans to Sub-Saharan Africa and Asia.

Growing Businesses in Peru and Ecuador

UNDP Peru has implemented the methodologies of the Inclusive Value Chains Programme since 2021, operating in seven regions of the country and achieving a 25% commercial increase among participating organizations. Since 2024, efforts have focused on strengthening the resilience and growth of MSMEs through impact measurement and greater visibility of their contributions to local economic, social, and environmental development.

Thanks to international cooperation from the Balearic Islands, an impact management and measurement tool was incorporated into the stages of the Growing with Your Business (GYB) methodology, which had already been implemented with MSMEs in the coffee value chain in the Amazonian region of San Martín. The selected MSMEs have significant reach in the region, together forming a network of more than 500 coffee producers.

Through impact management and measurement, the MSMEs participating in the program in San Martín have developed a deeper and more concrete understanding of how their activities connect with key concepts of sustainability and resilience. More details on the initiative here.

In Ecuador, UNDP and Produbanco have partnered to provide Inclusive Value Chain Programme methodologies for creating sustainable investment portfolios in MSMEs, through training sustainability teams within financial institutions.

This partnership has achieved significant progress in strengthening MSMEs. During the initial phase, technical assistance was provided to 10 companies located in Quito, Guayaquil, Santa Elena, and Cuenca, focusing on improving financial, administrative, and production management.

The initiative also promoted gender inclusion, with 50% of the businesses led by women and 80% female participation in the training of 20 credit advisors in the GYB methodology. More details on the initiative.

As United Nations System (UNS) member states prepare to meet next week in Seville, Spain, for the Fourth International Conference on Financing for Development, there is a key call to place sustainable development impact at the heart of all efforts related to development financing. Mobilizing international private resources toward the sustainable development priorities of Latin American countries remains a pending task, requiring collaboration among governments, the private sector, and international financial institutions.

In a world where economic resilience and sustainable development impact are urgent priorities, MSMEs cannot be left behind. On this World MSME Day, UNDP reaffirms its commitment to these enterprises and calls for renewed efforts to build more resilient, gender-responsive, and sustainable value chains as a step toward a more equitable, sustainable, and prosperous future for all.