The acceleration of the digital transformation on account of the pandemic is generating greater efficiency and productivity, which SMEs can take advantage of if they have more access to financing, training, simplification of procedures and connectivity

Digitalization, innovation, value chains and relocation of suppliers, opportunities for SMEs in the new normality

photo_camera CAF - Luis Carranza, executive president of CAF -development bank of Latin America-

The increase in digital commerce, with its cost reduction and greater accessibility, is one of the opportunities for small and medium enterprises (SMEs) in Latin America, which have been accelerated by the digital transformation produced by the COVID-19 pandemic.  This was one of the examples discussed at the CAF Conference: The New Economy and the Future of Latin American SMEs, which was held in Mexico City with the participation of 34 leaders from the region.  
 
In his opening remarks along with José De Luna, head of the Public Credit and International Affairs Unit of the Ministry of Finance and Public Credit of Mexico; Luis Carranza Ugarte, executive president of CAF, stressed that the agenda to support SMEs goes beyond their digital transformation, including a vision of inclusive development, improving productivity and the path to prosperity in Latin America.
 
"This year we have redirected lines of credit for USD 1.6 billion to support local development banks in their financial strategy with SMEs. We have channeled resources to commercial banks in lines and guarantees to accompany them and doubled our lines with microfinance companies, which are in the trenches of supporting microenterprises, the most affected in this whole process of the pandemic. Similarly, we support them from the non-financial side with innovation programs, internationalization, patents, and especially integration within value chains and business clusters," added Carranza.
 
For his part, Jose De Luna, said: "The confinement changed the consumption habits of the population, but opened opportunities for SMEs to develop new business models, find better distribution channels for products and services and can achieve greater productivity through the use of technology.  The Treaty between Mexico, the United States and Canada is a golden opportunity that we must all take advantage of; I believe it is a magnificent opportunity that we must not let pass.
 

Panel 1 Conferencia CAF en México
 
In the first panel: Crisis, reactivation and jump to a new economy; experts highlighted the need to increase access to financing, training and digitalization of SMEs as complementary measures to the plans developed by governments to keep them afloat and be able to adapt to the new reality. The Minister of Economy, Industry and Commerce of Costa Rica, Victoria Hernández, highlighted the opportunity for Fintech to bet on a model of immediate attention to SMEs; while Patricia Armendáriz, General Director of Financiera Sustentable, highlighted the opportunity for entrepreneurs to exploit the basic and healthy consumption that was imposed by the pandemic.
 

Segundo panel Conferencia CAF en México

Trends in global value chains, challenges and opportunities for SMEs in the region was the subject of the second panel in which leaders noted that the uncertainty generated by the COVID-19, coupled with geopolitical and commercial tensions, have opened a window for the relocation of suppliers and strengthen regional value chains and clusters for the benefit of SMEs. 

Panel 3 Conferencia CAF en México
 
In the third panel: Accelerating the digital transformation for SMEs
, panelists highlighted the need to strengthen human capital in the region to increase the diversity of talent in technicians, specialists and professionals, among others. "The pandemic made us take an incredible leap forced on digital transformation. Since we took this leap, the challenge now is to maintain that speed of transformation and not to go backwards," said Sylvia Constaín, Vice President of Government Relations for Latin America and the Caribbean at Visa and former Colombian Minister of ICT. For his part, Ernesto Kruger, founder of Kruger Corporation, recommended that entrepreneurs "first focus on their business and not on the other regulatory problems so that they can take off"; and he added: "the talent is there, but we must advance in the regulation of the countries because it is slower than what we entrepreneurs are reacting to".
 

Panel 4 Conferencia de CAF México
The pandemic took all companies out of their comfort zone and made them rethink their business models, processes and customer service. The directors of Mercado Libre, Ualá, Laboratoria, CO_ Capital and the Center for Entrepreneurship at IAE Business, presented in the fourth panel how they faced these challenges and the opportunities to emerge stronger from this situation.

Panel 5 Conferencia CAF en México
 
In the last panel: Public policies to promote SMEs towards the new economy, the Secretary of Economy of Mexico, Graciela Márquez Colín, presented the initiatives undertaken to support MSMEs in the country. "We have been working on a two-track strategy: prioritizing lower-income people and the most vulnerable microenterprises with transfers, preferential credit and payment facilities. The second consists of supporting MSMEs with precision shots and in cost-efficient ways through guarantees, training, e-wheels, digital inclusion, last mile technology, intelligent specialization, regulation and government purchases, among others," he explained.
 
The CAF Conference ended with the awarding of the regional winners of the University Essay Contest "Ideas for the Future" by the CAF Secretary General, Victor Rico, together with the Ibero-American Secretary General, Rebeca Grynspan. The Guillermo Perry Award was given to Omari Joseph from the University of the West Indies in Trinidad and Tobago; 2nd prize to Kevin Steven Mojica Muñoz from the Universidad de los Andes in Colombia; and 3rd prize to Nazarena Marano Suffern from the Universidad Torcuato di Tella in Argentina.

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