Entrepreneurship is a driving force behind economic growth and job creation. In Latin America, a region brimming with potentials yet facing challenges like limited access to capital, high informality, and economic instability, international support plays a crucial role in fostering innovation and business development.
Both the United States and Canada have launched various programs aimed at empowering entrepreneurs in Latin America. These initiatives provide financial support, mentorship, training, and networking opportunities to startups and small businesses, helping them scale and integrate into global markets. This article explores some of the key programs, their structure, funding mechanisms, and the impact they have had on entrepreneurship in the region.
1. AMERICAS PARTNERSHIP ACCELERATOR
The Americas Partnership Accelerator, launched by the United States Agency for International Development (USAID) in 2023, aims to strengthen entrepreneurship in Latin America and the Caribbean.
STRUCTURE AND FUNDING
- USAID invested $5 million as initial funding.
- The U.S. International Development Finance Corporation (DFC) helps connect entrepreneurs with venture capital funding.
- The Inter-American Foundation (IAF) contributes regional expertise to enhance the program’s effectiveness.
- Canada has committed Cdn$3 million, focusing on female and Indigenous entrepreneurs.
IMPACT AND OUTCOMES
- Provides access to training, skills development, and professional networks.
- Aims to mobilize additional investment capital, further expanding opportunities for local entrepreneurs.
- Helps businesses integrate into regional and international markets.
This initiative reflects the U.S. and Canada’s commitment to fostering inclusive economic growth by supporting small businesses and startups, especially among underrepresented communities in Latin America and globally.
2. SMALL BUSINESS DEVELOPMENT CENTERS (SBDC) PROGRAM
The Small Business Development Centers (SBDC) Program, introduced by the Organization of American States (OAS) in 2012, is another significant initiative funded by the United States. It strengthens Micro, Small, and Medium Enterprises (MSMEs) across Latin America and the Caribbean.
STRUCTURE AND FUNDING
- The U.S. government, through OAS, provides financial and technical assistance.
- The University of Texas at San Antonio offers business development expertise.
- The program operates in Brazil, Ecuador, Uruguay, and across the Caribbean.
IMPACT AND OUTCOMES
- Establishes business centers that provide mentorship, access to finance, and managerial training.
- Helps MSMEs overcome common challenges, such as lack of formal business knowledge and financial literacy.
- Currently, over 40 centers are operational in the CARICOM region, offering crucial business services.
The SBDC program plays a key role in professionalizing small businesses, making them more competitive in regional and global markets.
3. INTER-AMERICAN FOUNDATION (IAF)
Established in 1969, the Inter-American Foundation (IAF) is an independent U.S. government agency that funds community-led development projects across Latin America and the Caribbean.
STRUCTURE AND FUNDING
- Provides grants ranging from $25,000 to $400,000.
- Encourages recipients to co-invest and mobilize local resources.
- Since its inception, the IAF has provided over 5,800 grants totaling more than $957 million.
IMPACT AND OUTCOMES
- Strengthens local businesses and grassroots organizations.
- Enhances access to economic opportunities, particularly for marginalized communities.
- Promotes sustainable development by funding projects that foster long-term economic resilience.
IAF’s approach differs from traditional aid by focusing on local empowerment, ensuring that entrepreneurs have the tools and resources to sustain their businesses independently.
4. EXPORT DEVELOPMENT CANADA (EDC)
While primarily focused on supporting Canadian exporters, Export Development Canada (EDC) plays a significant role in fostering entrepreneurship and trade relations in Latin America.
STRUCTURE AND FUNDING
- A Crown corporation operating independently from the Canadian government.
- Provides export financing, trade credit insurance, and equity investments.
- Raises funds through fees, interest on loans, and issuing debt in capital markets.
IMPACT AND OUTCOMES
- Helps Latin American entrepreneurs integrate into Canadian and global markets.
- Supports Canadian businesses investing in Latin American startups and SMEs.
- Enhances cross-border trade, creating new economic opportunities for local businesses.
Though indirect, EDC’s role in financing trade and investment opportunities helps Latin American entrepreneurs scale their businesses and access international markets.
5. PARTNERSHIP FOR CENTRAL AMERICA (PCA)
Launched in 2021 in response to the White House’s Call to Action, the Partnership for Central America (PCA) is a public-private initiative aimed at boosting economic development in Honduras, Guatemala, and El Salvador.
STRUCTURE AND FUNDING
- Mobilized $3.2 billion in investments.
- Involves major corporations like Mastercard, Microsoft, and Millicom.
- Focuses on financial inclusion, digital connectivity, and job creation.
IMPACT AND OUTCOMES
- Integrated 450,000 individuals into the formal economy.
- Connected 4 million people to broadband internet.
- Facilitated $100 million in procurement contracts, benefiting local businesses.
By addressing the root causes of economic migration, the PCA helps create sustainable economic opportunities for entrepreneurs, reducing reliance on remittances and fostering local innovation.
The United States and Canada have played a pivotal role in supporting entrepreneurship in Latin America through various government programs. These initiatives address key barriers to business growth, including funding constraints, lack of training, and limited market access. Programs like The Americas Partnership Accelerator, SBDC, and IAF focus on direct funding and business development, while EDC and PCA enhance trade opportunities and digital connectivity. Collectively, these efforts create a more inclusive and resilient entrepreneurial ecosystem in Latin America.
Moving forward, the success of these programs will depend on continued investment, strong public-private partnerships, and a commitment to ensuring that entrepreneurs across the region have access to the resources they need to thrive in an increasingly global economy.
