Despite widespread poverty, there are positive signs for SME development in Nicaragua—most importantly the recognition of the contribution of the MSME sector (and in particular the agricultural sector and rural economy) as the driver for economic growth. The government and importantly private sector organisations recognise this fact and are working towards a more inclusive economy.

 

Key findings

Nicaragua is showing signs of ecosystem-building in terms of different actors coming together to make a coordinated effort to address SME development in the country. However, although there is good coordination, the depth and breadth of the ecosystem may be lacking in terms of the diversity and number of organisations that can provide high quality services and be able to sustain their own organisations. Furthermore, there may be a duplication of efforts.

One needs to question whether the rural technical advisory services for entrepreneurs are sufficient. With so many MFIs competing for clients, one has to wonder do they just compete on rates or do value-added services delivered by MFIs matter, and can more be done to strengthen these services as rural development will be key to the country’s success. Nicaragua is also an interesting country for work with the banking sector, as it is a highly concentrated and competitive banking sector that is recognising the importance of the SME client. There is also movement from the MFI sector to upscale their offering to provide larger loans. Whether these products can make a difference will depend on the technical assistance provisions that come with the money in terms of financial management and growing the business.

Other resources

  • ANDE's ecosystems mappings library contains other useful resources, indexed by region and country.

About Argidius’ mappings

We regularly commission SME ecosystems mappings in our target geographies. These studies are intended to give contextual overview and shed light on the challenges and opportunities for SME development and poverty alleviation. They include an inventory of service organisations and an analysis of the services landscape including areas of unfulfilled needs (gaps) Argidius use these maps to help identify organisations positioned to address these gaps.