The Issue in Latin America isn’t A Lack of Capital—It’s The Ineffective Delivery of Technical Assistance

By Juan Pablo Rivadeneira, Senior Manager of LATAM Growth at Silver Lining

(small.news) — SMBs are the backbone of the economy.

When I say SMBs, I mean small and medium-sized businesses. These are the corner store, the small manufacturer, the family-run service company, or the growing 10-person team trying to stabilize revenue. In Latin America, SMBs are not the exception. They are the economy.

According to the OECD and research by CAF and SELA, SMBs account for about 99.5% of all businesses in the region and generate roughly 60% of formal employment. At the same time, the OECD’s Latin American Economic Outlook 2025 highlights that the region continues to struggle with low productivity, growing only about 0.9% annually over the past decades. That gap matters because it directly affects how much these businesses can grow, hire, and survive over time.

The Promise—and Question—of Technical Assistance

This is where technical assistance is supposed to help. To be fair, Latin America does not lack support. There are workshops, training programs, accelerators, mentorship initiatives, and many other efforts to help small businesses succeed.

But the real question: does this support actually change how SMBs operate?

What the Evidence Actually Shows

When technical assistance works, it works. A large review by the World Bank, analyzing dozens of SME support programs, found that these interventions can improve business performance, increase employment, and raise productivity.

The key detail is how it works.

One of the most cited studies, summarized by J-PAL and conducted by researchers at the World Bank, examined small businesses in Mexico that received hands-on managerial consulting rather than just training. The results were clear: higher productivity, more hiring, and sustained improvements over time. This was not about inspiration. It changed how the business actually operates.

The Design Problem in Latin America

Latin America does not lack technical assistance; it struggles with how that support is designed. Much of the support provided to SMBs includes training-based and short-format interventions, which are widely used by policymakers but have shown relatively modest and inconsistent effects on business performance. Evidence from the World Bank’s meta-analysis of SME support programs shows that traditional training programs often generate limited impact on profits and sales, while more intensive, hands-on approaches, such as ongoing consulting or embedded support, consistently produce greater and more durable improvements in productivity, employment, and overall business performance.

Why One-Off Training Doesn’t Stick

Running an SMB is not an event. It is a continuous set of decisions: pricing, hiring, inventory, sales, cash flow, operations, and those decisions happen every single week. If support does not show up inside that rhythm, it rarely sticks. This is consistent with the evidence: more intensive, ongoing support changes outcomes more than light-touch training alone.

The Structural Challenges SMBs Face

At the same time, SMBs in Latin America operate in a tough environment. The Inter-American Development Bank, as cited by Reuters, highlights that markets in the region tend to be more concentrated and face structural barriers. These limit competition and growth. The OECD also points to weak productivity across the region.

This means many SMBs are not just dealing with internal challenges; they are also navigating systems that increase costs, limit access, and make scaling more difficult. In that context, generic support is not enough.

The Visibility and Informality Gap

There is also a visibility gap. Many SMBs in Latin America remain partially or fully informal. Research from Economist Impact, supported by J.P. Morgan, shows that informality still accounts for more than half of employment in the region. A significant share of economic activity operates outside formal systems.

At the same time, many SMBs are still at a basic level of digitalization. This matters because visibility—meaning transactions, records, and data—allows businesses to access financing, build credibility, and grow sustainably. The World Bank shows that even adopting digital payments can improve access to credit. Digitalization reduces information gaps between businesses and lenders.

Technical assistance must help SMBs gain visibility to fully join the economy—not just teach them.

Rethinking What Effective Support Looks Like

Technical assistance shouldn’t feel like a class; it must integrate into daily business, remain practical, and focus on execution. Day-to-day actions with the right plan, structure, and support are what actually move the needle for small business owners.

Where Institutions Are Heading

This is already reflected in how institutions like the International Finance Corporation and the Inter American Development Bank are increasingly linking technical assistance to financing, investment readiness, and real business outcomes.

From Advice to Execution

Latin America does not need more people telling SMBs what to do; it needs systems that help them actually do it. Because SMBs are not built in workshops, they are built in the day-to-day decisions that determine whether a business survives, stabilizes, and grows.

And until technical assistance shows up at that level, it will continue to feel helpful but fall short of changing outcomes.

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