Purpose-Driven Credit: The Key to Unlocking Real Growth for MSMEs

According to data from the Inter-American Development Bank (IDB), 70% of micro and small enterprises (MSMEs) in Latin America lack access to formal financial systems, and over 50% of them shut down within two years of operation. Not due to a lack of talent or market demand, but because for many businesses that don’t generate immediate profits, operating without credit is like diving without oxygen: sooner or later, they drown.

When an MSME cannot secure bank financing, its need for liquidity doesn't vanish, it shifts to the founders' personal finances. Personal credit cards, informal loans, debt with suppliers … in many cases, business owners end up more indebted than their companies. The line between entrepreneurship and personal financial collapse becomes dangerously thin.

In Mexico, 45.7% of SMEs have outstanding debts with suppliers, a clear indication that they resort to informal credit due to a lack of formal alternatives (source: ECOBI).

Across Mexico and Latin America, MSMEs are the backbone of the economic and social fabric. They generate over 70% of employment and contribute nearly 50% of GDP in countries like ours. In this context, credit becomes more than a financial instrument, it is a tool for transformation.

As I’ve often said: Credit should not be viewed solely as debt, but as a vehicle for creating value — provided it is paired with financial education and a business mindset. Otherwise, it becomes a burden rather than a solution.

Credit as a Starting Point

In recent years, we’ve seen a fundamental shift in the financial ecosystem: Credit is no longer a privilege for the few but — at least in theory — an increasingly accessible tool for entrepreneurs. Fintechs, microfinance institutions, and new digital platforms have expanded access, offering financial products tailored to the needs and profiles of small businesses.

It’s worth noting that formal microenterprises receive nearly three times more credit access than informal ones, a clear sign that formalization paves the way for financing under better terms.

Still, the true power of credit lies not only in the capital provided but in what it can unlock: planning, formalization, growth, and professionalization. A small neighborhood store, for example, once granted responsible credit, can forecast cash flow, invest in inventory, improve its storefront, hire staff, or adopt technology. That is the beginning of a story of local economic development.

But for this to happen, financial education is essential.

Financial Education as the Foundation

Too often I’ve seen credit misused — redirected for personal expenses, taken without structure or repayment strategies — ultimately worsening a company’s financial situation. This doesn't stem from bad intentions, but rather from a lack of information, guidance, and basic business management skills.

That’s why credit must be accompanied by practical financial education programs, tailored to each business’s reality. We’re not talking about economics lectures, but simple, actionable content that addresses key questions:

•  How do I separate personal and business finances?

•  How do I build a budget?

• How do I know if a loan is sustainable?

• What does the total cost of credit really mean?

Every time a financial institution — traditional or digital — extends a loan, it bears an ethical and social responsibility to educate the borrower. Lending capital without equipping the borrower to manage it wisely serves little purpose.

Enabling a Virtuous Ecosystem

To help MSMEs grow and become true engines of economic development, we must build an ecosystem where credit is no longer the exception, but the norm. But not just any credit — responsible credit, with fair rates, transparent criteria, and ongoing support mechanisms.

This demands action on multiple fronts:

• Public policies that support financing programs with an educational and productive focus

• Financial institutions that view MSMEs not as risky clients but as long-term partners

• Civil society organizations that offer training, mentorship, and support networks

• And most importantly, an entrepreneurial culture that understands that growth also means learning.
   

It’s not enough to simply give someone a fish—or even teach them to fish—we must also build the river, keep it clean, and ensure everyone has access to a fishing rod.

Technology, Inclusion, and the Road Ahead

Today more than ever, technology can be our greatest ally. Digital platforms, alternative credit scoring models, e-wallets, and data analytics tools enable more inclusive, personalized, and efficient lending. But technology without local context can fall short. That’s why digital solutions must be designed from and for the realities on the ground.

When MSMEs gain access to formal credit under fair conditions (rate, term, collateral), they can do far more than just cover costs—they can invest, innovate, and scale. Shifting the narrative from credit = debt to credit = value driver is not just wordplay, it’s a statistically and strategically proven reality. Properly deployed, credit is far more than a liability, it is a real opportunity to transform businesses, create jobs, and strengthen economies.

Let’s not forget that behind every MSME there is a story, a family, and a community. If we design financial products centered on people — with education and empathy — we can cultivate the fertile ground for human-centered economic growth.