G&T Continental: Supporting MSME financing in Guatemala
Micro, small and medium enterprises (MSMEs) are one of the most unattended sectors by credit institutions across the region, and their growth is hampered by limited access to the financial system. Yet, MSMEs are a crucial business segment given their ability to create jobs and their importance in household incomes.
In Guatemala, the story is no different: MSMEs constitute 40% of GDP and employ 85% of the labor force (2009). To help overcome these barriers, the IDB partnered with G&T Continental in Guatemala through a $90 million loan to support the bank in financing MSMEs and in facilitating their access to credit.
A 2011 study conducted by the consulting firm Central American Business Intelligence (CABI) determined that by providing MSMEs with access to credit, G&T Continental was generating a positive impact for its more than 20,000 MSME clients:
- Access to better financing conditions allowed business owners to obtain better prices on their supplies and to increase the quality of their products. This has resulted in increased sales and customer base.
- 64% of G&T Continental customers stated to have nutrition, as opposed to 34% of non-clients.
- 62% of G&T Continental customers’ household members improved their clothing and wardrobe, compared with 38% of non-beneficiaries.
- Housing for 51% of G&T Continental customers improved, compared to 35% of non-customers.
- 71% of the children of G&T Continental customers increased their school attendance, versus 66% of non-users.