The adoption of financial innovation poses significant challenges for Latin America and the Caribbean, in particular for micro, small and medium-sized enterprises (MSMEs). Despite the progress made by the region, access to financing still represents the main obstacle faced by MSMEs.

During the “Regional Meeting on innovative mechanisms for financing and guarantees for MSMEs in Latin America and the Caribbean”, held in April 2017 in Santo Domingo, Dominican Republic, an emphasis was made on the needs of MSMEs concerning: i) Diversity of financial products and services, wider dissemination of them and more effective access to these financing possibilities; ii) Promotion of financial literature and training in ICTs (information and communications technologies) and incorporation of innovation into business management; iii) Optimization of the business climate in order to reduce risks for financial institutions; and iv) Creation of subregional financing schemes.

Given the characteristics of MSMEs, which represent a large and economically important sector with huge financing needs, financial inclusion should be considered a productive inclusion policy. In this connection, achievements in financial technology have increased. However, little is known about the new microfinance platforms that have emerged, as the so-called Fintech or Crowdfunding, which are currently a viable financing alternative for MSMEs in Latin America and the Caribbean.

Despite regional efforts aimed at formulating innovative strategies to mitigate risks, reduce costs and increase attention to financial needs of MSMEs, it is necessary to strengthen rapprochement between regulatory entities and private-sector stakeholders to promote the search for effective solutions and better use of existing opportunities.

Thus, the Latin American and Caribbean Economic System, through its SELA-SMEs Programme, offers a space for regional encounter that will enable follow-up of achievements in financing and new initiatives in Latin America and the Caribbean, highlighting the following themes: Cooperation between commercial banks and microfinance institutions for financing MSMEs, improvements in financial infrastructure in the region, the role of national development banks in the financial inclusion of MSMEs and best practices and, finally, the potential of financing options for MSMEs, such as “fintech”.