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

SBDCs increase the formalization, competitiveness and development of small and medium-sized businesses by providing 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 the Paraguayan economy, which has been on an upward trajectory in recent decades. From 2003 to 2018, the economy saw an average GDP growth of over 4%, although that momentum slowed from 2019 to 2022, impacted by the COVID-19 pandemic and droughts, according to the World Bank. Its Gini index coefficient, which indicates how wealth is distributed in a particular country, has decreased over the past two decades, reaching 45.1 in 2022, indicating an increasingly equitable economy. The team expects SBDCs to further catalyze these trends.

The UTSA SBDC International Trade Center and the MIC began dialogues in 2020, when the MIC expressed an interest in creating small business development centers to spur growth in Paraguay. USAID funded the first phase of the project in 2022, with the goal of building 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," 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 economic development journey."

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

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

Finally, the International Trade Center worked with the MIC and local host organizations to launch the centers. This included recruiting and training staff to maintain the centers. Two new SBDCs were opened in 2023 and a third debuted in 2024. They are located in San Lorenzo, hosted by Unión Industrial del Paraguay (UIP); Encarnación, hosted by la Universidad Autónoma de Encarnación (UNAE); and Ciudad del Este, hosted by la Fundación Parque Tecnológico Itaipú.

Metrics from the first two locations reflect the centers' significant productivity in 2023. The MIC reported that nearly 600 hours of advising took place with 109 clients. Clients gained access to nearly $50,000 in capital or new financing and over $30,000 was generated in sales. These initial metrics are expected to grow in future phases of the project.

UTSA, supported by USAID, marked the successful launch of the centers last month, hosting a delegation of Paraguayan leaders in government and industry. The group of approximately 30 visitors, including national ministers, representatives from the Paraguayan senate and house, and key business leaders, held meetings with the VIED for key agencies in Washington, D.C. to strategize next steps for the Paraguay SBDC program.

"We were very excited to be hosting such an amazing delegation from Paraguay with the Ministry of Industry and Commerce," said Riddell. "The visit helped the delegation deepen its 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 to expand its reach and impact in future phases.

"Now, USAID and UTSA are working with the MIC to position the Paraguay SBDC program as a vital resource to local communities and an indispensable partner in their economic growth," said Riddell.

She expects that their 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 competitively. Its International Trade Center, which is fully funded by grants, has set up 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 pursues grants to promote development and create bold futures for small businesses beyond San Antonio.

"We've been doing this type of work for around 22 years, and we have an outstanding track record. Very few universities have been working in this space until quite recently," said Carla Cardenas, senior project manager at the International Trade Center.

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