Paraguay is referred to as the heart of South America for its geographic location. Its economic structure is similar to that of Taiwan, meaning that workers hired by micro, small and medium-sized enterprises (MSMEs) account for the majority of the labor force and MSMEs comprise the largest share of the total number of companies in the country’s industrial sector. However, segregated advisory system and supportive resources for MSMEs in the country hamper the MSME sector from its full development potential.

One of the reasons is that MSMEs in Paraguay, as commonly seen in other developing countries, often have limited access to finance due to high interest rates and collateral requirements on loans. Being excluded from the services of commercial banks and capital markets, MSMEs are unable to obtain the capital required to improve their productivity and business performances. To address this issue, the TaiwanICDF is in discussion with Fundación Paraguaya (FP), a Paraguayan non-for-profit social enterprise which has a nationwide network and extensive local know-how on microfinance, to work together on providing credits to micro and small-sized enterprises.

The idea of social business nowadays has become well recognized in the international development community. Through providing advisory services, incubation support and entrepreneurial education, and combined with startup funding resources, the considered cooperation with FP is expected to help local micro and small-sized enterprises attain sustainable development, one of the visions shared by many social businesses.

In addition to providing loans to Paraguay’s micro and small-sized enterprises, the TaiwanICDF starting from 2019 also assists the Government of Paraguay in upgrading the nation’s MSMEs advisory and consultation regimes and strengthening the effectiveness of its support for MSMEs. Through these dual interventions, the TaiwanICDF is providing ever more comprehensive development assistance to Paraguay’s MSMEs sector.

The global economy is currently affected by coronavirus disease 2019 (COVID-19). Paraguay’s micro and small sized enterprises are also facing sever challenges. This cooperation may bring timely living water to local micro and small-sized enterprises and sustain their competiveness.

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• Update: 2020/03/30
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