SMEs drive economic activity and employment in Latin America and the Caribbean

Small and medium-sized enterprises (SMEs) serve as a fundamental pillar of economic activity across Latin America and the Caribbean. In this region, micro, small, and medium enterprises represent approximately 99% of all businesses and generate more than 60% of formal employment.

A global study by Visa, titled ‘The Multiplier Effect: Visa 2026 Small Business Banking Report’, highlights the growing importance of this segment for financial inclusion and productivity. The report, based on surveys of over 5,600 small business owners and interviews with banking leaders across 17 markets, suggests that banks and fintechs have significant opportunities to drive sustainable growth by deepening relationships with SMEs and promoting digitalization.

In specific contexts like Venezuela, a paradox exists where digital transaction infrastructure is highly developed—with 84% of the population holding bank accounts—yet formal credit remains nearly non-existent. While mobile payments are widely used to navigate inflation and cash shortages, structural exclusion persists because traditional banking requirements for collateral and proven income are often impossible for informal workers and small merchants to meet. In such environments, microfinance institutions play a critical role by providing resources and technical education to those underserved by traditional banking.