Small businesses grow in Paraguay with support from UTSA’s economic development institute

SBDCs increase the formalization, competitiveness, and development of small and medium-sized enterprises by providing them with technical assistance and training, which helps them obtain financing, identify new buyers, and enter new markets. This boosts the quantity and quality of production, creating a positive feedback loop in which market demand can be met and, in turn, increased.

This mission will complement other programs and initiatives designed to boost Paraguay’s economy, which has been on an upward trajectory in recent decades. From 2003 to 2018, the economy experienced average GDP growth of more than 4%, although that momentum slowed from 2019 to 2022, affected by the COVID-19 pandemic and droughts, according to the World Bank. Its Gini coefficient, which indicates how wealth is distributed in a particular country, has declined over the past two decades, reaching 45.1 in 2022, indicating an increasingly equitable economy. The team hopes that SBDCs will further catalyze these trends.

The UTSA SBDC International Trade Center and MIC began discussions in 2020, when MIC expressed interest in creating small business development centers to stimulate growth in Paraguay. USAID funded the first phase of the project in 2022, with the goal of developing the capacity and expertise needed to implement this model, and subsequently funded phases two and three to establish SBDCs in Paraguay.

“Our center has been committed to expanding the SBDC model internationally for over 20 years,” he said. Janette Riddell, Director of the UTSA International Trade Center. “So when the Paraguay MIC became interested in the SBDC model, we were excited to help them on their path to economic development.”

The UTSA team began the project with a needs assessment to understand the specific barriers to economic growth in Paraguay and develop tactics to combat these obstacles.

The team then established a charter to implement the SBDC model in a way that is scalable, sustainable, and impactful.

Finally, the International Trade Centre worked with MIC and local host organizations to launch the hubs. This included hiring and training staff to maintain the hubs. Two new SBDCs opened in 2023, with a third debuting in 2024. They are located in San Lorenzo, hosted by the Industrial Union of Paraguay (UIP); Encarnación, hosted by the Autonomous University of Encarnación (UNAE); and Ciudad del Este, hosted by the Itaipú Technology Park Foundation.

Metrics from the first two locations reflect the significant productivity of the centers in 2023. MIC reported that nearly 600 hours of consulting were performed for 109 clients. Clients gained access to nearly $50,000 in capital or new financing and over $30,000 in sales were generated. These initial metrics are expected to increase in future phases of the project.

UTSA, with support from USAID, celebrated the successful launch of the centers last month by hosting a delegation of Paraguayan leaders from government and industry. The group of approximately 30 visitors, including national ministers, representatives from the Paraguayan Senate and House of Representatives, and key business leaders, met with VIED from key agencies in Washington, DC, to strategize the next steps for Paraguay’s SBDC program.

“We were very excited to host such an amazing delegation from Paraguay with the Ministry of Industry and Commerce,” said Riddell. “The visit helped the delegation deepen their understanding of the different aspects of the SBDC model, and we look forward to seeing the SBDC program strengthen and grow in Paraguay.”

This phase of the project will end this October, but the team hopes to continue expanding its scope and impact in future phases.

“USAID and UTSA are now working with MIC to position Paraguay’s SBDC program as a vital resource for local communities and an indispensable partner in their economic growth,” Riddell said.

She hopes that her pilot program will lead to a broader network of SBDCs that continue to drive economic activity and job creation in Paraguay.

UTSA is one of a select group of universities supported by USAID, which awards funding on a competitive basis. Its International Trade Center, which is funded entirely through grants, has established SBDCs in 24 countries. The center is expanding UTSA’s representation in the international economic development arena and broadening the university’s research footprint as a high-performing minority-serving institution. It also continually seeks grants to promote development and create bold futures for small businesses beyond San Antonio.

“We have been doing this type of work for 22 years and we have an outstanding track record. Very few universities have worked in this field until very recently,” he said. Carla CardenasSenior Project Manager at the International Trade Centre.