MSME Financing Instruments in Latin America and the Caribbean During COVID-19
Micro, small and medium-sized enterprises (MSMEs) comprise 99.5 percent of the businesses, 60 percent of the employed population, and about 25 percent of the gross domestic product (GDP) in Latin America and the Caribbean (LAC). Despite their social and economic importance, MSMEs have had great difficulty accessing credit, even before the COVID-19 pandemic struck the world. This paper analyzes access to finance for MSMEs in LAC. It also surveys the theoretical and empirical literature on access to finance in times of economic and financial crisis, discusses an approach to insolvency in the region, and provides policy recommendations for monetary and financial measures in the context of the pandemic. A summary of monetary and fiscal measures in LAC and Organisation for Economic Co-operation and Development (OECD) countries is included as an annex to the document.