LA PAZ/Washington,D.C., August 17, 2004—The
Latin America and the Caribbean Small and Medium Enterprise Facility (LAC
SME Facility), a regional technical assistance program of the International
Finance Corporation, today launched a project in Santa Cruz de la Sierra,
Bolivia, to broaden access to finance for small and medium enterprises
(SMEs) in the country’s wood sector.
Representatives of over 20 small businesses in the wood sector attended
the launch of the project, as well as the Prefect of Santa Cruz, the Bolivian
forestry superintendency, and Alieto Guadagni and Veronica Querejazu -
the Executive Director and Alternative Executive Director, respectively,
of the World Bank Group representing Argentina, Bolivia, Chile, Paraguay,
Peru, and Uruguay.
IFC, the private sector arm of the World Bank Group, has identified the
wood sector as a priority for its technical assistance program in Bolivia.
The country has 33.6 million hectares of forests – equal to nearly one
third of its land area – and Bolivia is a leading world producer of tropical
certified wood, with export receipts totaling more than $100 million in
2003. It has 1.4 million hectares of tropical forests certified by the
Forest Stewardship Council -over 30% of the world's total – and the wood
sector is also an important source of employment in Bolivia: around 950
small businesses are registered under the Bolivian Chamber of Forestry.
The findings of a recent comprehensive IFC study on Bolivia’s wood sector
showed that the growth of potential of SMEs is hamstrung by weak access
to local finance, owing largely to their weak financial organization and
adverse credit risk perceptions of domestic banks and other financial institutions.
IFC’s LAC SME Facility will therefore provide a few pre-selected SMEs
with technical assistance during the pilot phase of the project to strengthen
their levels of financial reporting and transparency.
Concurrently, IFC will partner work with local financial institutions to
structure financing packages for small businesses that successfully complete
the pilot project. The corporation will also provide technical assistance
to improve the operational efficiency and performance of the small businesses
so that they can attract more private investment inflows.
IFC is teaming up with Fundación Bolivia Exporta (FBE), established in
September 1991 with support from the World Bank Group, to implement the
project. FBE helps open up new markets for Bolivian enterprises oriented
towards external markets or import substitution. FBE will also manage funds
that may be deployed as a preferential source of financing for small businesses
involved in the project. IFC’s small and medium enterprises Capacity Building
Facility will provide some of the financing for the project.
Atul Mehta, IFC Director for Latin America and the Caribbean, said, "IFC’s
technical assistance will help strengthen the global competitiveness of
Bolivian SMEs in the sector by improving the efficiency of their operations,
making access to local finance easier.” He added, “By partnering with
FBE, the LAC-SME Facility will help build capacity of key SME intermediary
support services in Bolivia and enhance the long-term sustainability of
Arturo Bowles, Director of the Bolivian Forestry Chamber, noted "Prior
to launching this project, the Facility worked with the chamber to assess
the long term growth potential of the wood sector and identify small and
medium businesses that could be strengthened. We look forward to
continuing our collaboration with IFC through the implementation of the
Latin America and Caribbean Small and Medium Enterprise Facility,
headquartered in Lima, Peru, provides technical assistance for supporting
the development of small and medium enterprises in Bolivia, Honduras, Nicaragua,
and Perú, helping boost private sector wealth and job creation. Its areas
of focus are to strengthen the global competitiveness of small businesses;
make it easier for such firms to do business by simplifying the business
regulatory environment; broaden access to finance for SMEs; and foster
indigenous and socially responsible enterprises.
The mission of IFC (www.ifc.org)
is to promote sustainable private sector investment in developing countries,
helping to reduce poverty and improve people's lives. IFC finances private
sector investments in the developing world, mobilizes capital in the international
financial markets, helps clients improve social and environmental sustainability,
and provides technical assistance and advice to governments and businesses.
From its founding in 1956 through FY03, IFC has committed more than $37
billion of its own funds and arranged $22 billion in syndications for 2,990
companies in 140 developing countries. IFC's worldwide committed portfolio
as of FY03 was $16.8 billion for its own account and $6.6 billion held
for participants in loan syndications.