Small business grants seek to increase competitivity

With a vast agricultural, scenic and environmental richness, the Huétar Norte Region is little known outside of Costa Rica, and even internally its productive and touristic potential is not fully explored. More than half the milk produced in the country comes from that area, which covers 20 percent of the national landscape and it is home to only 7 percent of Costa Rica’s population.

The region is known for having areas of rural poverty, a low income level and a low social development index, particularly in cantons near the border with Nicaragua.

The Multilateral Investment Fund, a member of the Inter-American Development Bank Group, will invest almost $1 million to expand the participation of the micro, small and medium-sized enterprise in agriculture and bolster innovation of products, processes and services offered by both the agricultural and tourist sectors.

Likewise, the project will also assist in a better coordination between the local and national government and private institutions in order to improve the formulation, implementation and conflict resolution related to productive development strategies in the region, said the fund.

“The project seeks to take advantage of regional assets in a way that is environmentally responsible and sustainable, based on an effective public-private relationship,” said Betsy Murray, the Multilateral Investment Fund’s project team leader. “In fact, we expect to increase the role of the most vulnerable population in production chains and contribute to reducing poverty in the region.”

The project aims to improve the capacity of producers and agricultural small businesses to compete in the market by promoting the concepts of partnerships, productive chains and cleaner processes to reduce environmental impact. At least four production chains have been identified — pineapple, chile picante, ipecacuana (medicinal root) and palm heart —that can be potentially improved in terms of product quality, processing and industrialization.

In terms of the tourist sector, the project proposes the creation of the first carbon footprint management model for companies at the national level. It is expected that other sectors will replicate this model and thus contribute to the Costa Rican government’s goal to reach national carbon neutrality in 2021.

The project will finance technical assistance to more than 30 tourist and agricultural micro, small and medium-sized enterprises to measure their carbon emissions and cleaner production plans; improve their handling of agricultural waste; and design new tourist products that take advantage of the U.N. declaration of the area as the Agua y Paz Biosphere Reserve.

The fund also is providing $1 million in financing for the rural credit services expansion project in the Central Sur region. The project aims to expand access to credit for small producers and rural micro entrepreneurs that lack resources to improve their socioeconomic condition.

This project comes at a critical time for the Costa Rican microfinance sector, whose growth has slowed down in recent years following the global financial crisis.

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