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Sustainable Finance for Small and Medium-Sized Enterprises in an Emerging Market (2 Bridges for Economic Growth in Honduras)
This case presents the real-world history of a field program to promote the financing of viable small and medium enterprises (SMEs) in one of the poorest and most troubled countries of the world. A key goal and expectation of the donor-funded project was the promotion of social enterprises - sustainable local businesses that create employment and promote economic development. A second, and just as significant expectation, is that the services provided by this program on a subsidized basis should also become sustainable, as a service that can be costed-out to the financial institutions and clients. The idea of 2 Bridges refers to the two sides of the effort: one that operates through lending by commercial banks, and one that operates through creation of an angel venture fund to invest in equity of the SMEs. The program in Honduras is described in detail, along with issues and questions for further analysis, discussion, debate, and potential implementation in other countries and contexts.