Context
More than 90% of all businesses in Latin America are small and medium-sized enterprises (SMEs) that generate 70% of jobs and contribute an estimated 32% to 53% to the region’s GDP.
These enterprises face similar and deep-rooted challenges: competitiveness regarding volume, quality and prices for their products and services, access to markets and customers, inexperience with procedures and regulations, and access to equity and debt.
These challenges, expressed in terms of productivity and competitiveness, limit the ability of these businesses to compete in increasingly demanding local and global markets. Thus, the great potential of SMEs to provide employment and contribute to an inclusive economic development is significantly affected.
Inclusive markets are profitable, environmentally and socially responsible initiatives that seek to improve, through market forces, the quality of life of low-income communities, encouraging their participation in all phases of the value chain. Inclusive markets help those living at the base of the socio-economic pyramid, serving as an alternative —and complement— to aid, philanthropy and traditional government expenditures.
Inclusive markets in Latin America have a unique opportunity to provide low-income families with better access to products and services that genuinely improve their quality of life.
Opportunity identified by AVINA
To improve the creation and expansion of businesses with a triple bottom-line approach (financial, social and environmental) in a way that makes inclusive markets a major force in the economy of Latin America.
AVINA and its allies’ strategy for action
For a business to be successful there must be a market and an enabling, inclusive environment that can also offer favorable conditions for growth and sustainability. The configuration of a competitive market depends on a variety of interactions and transactions among actors who cluster into “Inclusive Market Ecosystems” according to their purpose and context.
AVINA works in three main areas to promote an inclusive market in Latin America:
Opportunity-Driven Entrepreneurship: Identifying and training opportunity-driven entrepreneurs and exposing the general population to social and environmental entrepreneurship.
Impact Investing: AVINA utilizes multiple market-based solutions to foster impact investing in the region.
Inclusive Business Development: AVINA identifies and promotes multiple business models for social and environmental impact. AVINA focuses on business development with existing specialized organizations (e.g. incubators, accelerators, technical assistance providers, etc.) or helps to create them where they are missing.
Fundación AVINA works in Latin America as a broker, co-investor and facilitator, leveraging its resources, local presence and relationships with thousands of allies to nurture and scale up shared strategies for change.
Alliances
AVINA is continuously building relationships with a wide range of allies, creating bonds of trust that allow the construction of shared agendas for action with relevant and globally recognized institutions.
AVINA has key collaborative alliances with the following FUNDES, World Resources Institute, Ashoka, World Business Council for Sustainable Development, Netherlands Development Organization (SNV), Social Enterprise Knowledge Network, Aspen Network for Development Entrepreneurs, the Latin American Venture Capital Association, Red Iberoamericana de Negocios Inclusivos and NextBillion.
Challenges
To provide technical assistance and training for entrepreneurs, and mobilize credit and investment capital to achieve wide impact.
Some achievements with our allies
“Business to Disabled“, an organization dedicated to the inclusion of people with disabilities in the labor market, has managed to include 100 professionals, mostly in medium and large enterprises in Peru.
This type of social investment and commitment to society has brought notoriety to “Business to Disabled” in Peru. In addition to garnering positive media coverage, this organization was awarded the “National Competition for Innovative Projects” by the Peruvian University of Applied Sciences, for its inclusive business plan for people with disabilities.
The organization’s website was visited 88,000 times in 2010, which helped spread its campaign across the media and enabled 102 companies to join its projects.
Bolivian Council for Inclusive Businesses Leads the Development of Inclusive Markets and Businesses in Bolivia
In April 2008, AVINA, AMIGARSE, FUNDES, CARE and Swiss Contact came together to launch the Bolivian Council for Inclusive Markets (COBONEI), a program encouraging the creation of inclusive markets. The main objective was to carry out training and awareness programs as well as to identify, strengthen and encourage inclusive markets to disseminate best practices in the country.
In its third year of work, AVINA assisted COBONEI members and other organizations at the first International Forum for Inclusive Markets in Santa Cruz de la Sierra, Bolivia, in the development of several companies in the field of recycled materials.
More than 90% of all businesses in Latin America are small and medium-sized enterprises.
About 270 million people in Latin America, or 46% of its population, live below the poverty line.
Latin America is the most unequal region of the world in terms of income distribution.
Small and medium-sized enterprises generate 70% of jobs in Latin America. They also contribute an estimated 32% to 53% to the region’s GDP.
