Risk Capital Industry Promotion in Peru

Invertir Institute presents a proposal to promote the Venture Capital Industry in Perú

Invertir Institute, after 6 months of research performed by its consultants, has concluded the study that corresponds to the project “State promotion of Venture Capital Industry in Peru“ financed by USAID PERU/MYPE COMPETITIVA.

This study acts as a proposal for governmental action to promote the Venture Capital Industry, as presented to the Executive Director of MYPE COMPETITIVA, Juan Carlos Mathews.

The objective of this project began with the intention of proposing a program of integral promotion and a set of regulatory and tributary proposals for the Peruvian Government in order to favor the development of the Venture Capital Industry that would direct funds towards the investment on small and medium enterprises (SMEs) in our country.

The necessity to promote the development of a strong Risk Capital Industry for the SMEs, also known as Venture Capital (VC), is sustained by the financing limits that SMEs find in the traditional financial markets; limiting their growth potential and abilities to create jobs.

It has been demonstrated by the analysis of similar experiences in developed countries, among them the U.S., and from experiences in countries such as Chile, Mexico, and Brazil, whose economies are leaders of the VC development in our region, that it is important for this industry to develop as a strong financial alternative for the growth of SMEs; and that from the begining, the Government must play a promoter role in this development without ignoring any free-market principles.

Furthermore, the study performed by the consultants of Invertir Institute contains the proposal named “Promotion of a fund of funds for the Development of Small and Medium Enterprise – SME Capital” which sets a governmental promotion mechanism for the given industry, which would work through COFIDE, added to regulatory and tributary changes that follow the same direction.

It is expected that in the short term this proposal gets implemented in order to promote the development of SMEs in our country.

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