A Comparative Analysis of IDB Approaches Supporting SMEs: Assessing Results in the Brazilian Manufacturing Sector

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Oct 2014
The Office of Evaluation and Oversight (OVE) of the Inter-American Development Bank (IDB, or the Bank) conducted an impact evaluation to assess the effectiveness of the main types of programs through which IDB has supported small and medium-sized enterprises (SMEs) in Latin America and the Caribbean. It does not evaluate Bank projects directly or compare executing agencies, models of interventions or financial instruments, but rather examines the effectiveness of Bank-supported approaches implemented by Brazilian institutions. Focusing only on the manufacturing sector, the evaluation examines how these interventions affect firm-level outcomes such as employment, real wages, exports, and patent and trademark registration. The overarching objective of this exercise is to provide insight for future strategic decisions regarding the targeting of Bank support to SMEs.

The rationale for choosing Brazil is threefold: (i) Brazil represents 55% of IDB's total volume of lending supporting SMEs; (ii) country stakeholders have collected data from SMEs exposed to various types of interventions, allowing OVE to learn about alternative SME support approaches in Brazil; and (iii) OVE has access to comprehensive datasets that facilitate impact evaluations in Brazil.

OVE bases the analysis on the types of interventions the Bank has supported in Brazil, compares the results they achieved, and draws lessons for the future design and implementation of SME support strategies and budget allocation considerations.