Financing SMEs and Entrepreneurs 2026: Chile
Table of contents
Chile's GDP grew by 2.6% in 2024, mainly driven by an increase in mining exports. Although investment declined by 1.4%, and consumption recorded a growth of just 1.0%.
Regarding Micro, Small and Medium Enterprises (MSME), the Internal Revenue Service1 (SII) provides a size classification based on firms’ total annual sales. According to SII records, MSMEs accounted 98.6% of the firms for the tax year 20242, but only represented 12.6% of total annual sales.
In terms of MSME access to credit, results from the “Banking Credit Survey” of the Central Bank of Chile3 (BCCh), show that in Q4 2024, conditions for the supply and demand of credit remained limited, although they were moderately less restrictive than in Q4 of 2023.
The outstanding debt of SMEs and the share of the outstanding stock of SME loans to the total loans increased between 2023 and 2024. Specifically, SMEs loans increased from CLP 26.2 billion in 2023 to CLP 26.9 billion in 2024, and the share of stock increased from 19.6% to 20.7% during the period.
Meanwhile, other financing alternatives for firms like factoring and invoice discounting were stable between 2022 and 2024, reaching around CLP 5.4 billion in the stock of factoring operations.
New developments on policies to support MSMEs and particularly the financing of MSMEs, through the Production Development Corporation4 (Corfo) and the Technical Cooperation Service5 (Sercotec) included the expansion of social programs, and promotion of instruments related to formalization and financing. Through Sercotec, instruments related to foster formalization and support for micro and small firms in different areas, benefited more than 9 000 firms and cooperatives from all regions of the country, for more than USD 40 million in 202456. While in the case of financing MSMEs, Corfo supported more than 23 000 companies, granting credits for more than USD 1.3 million.7
Instruments focusing on formalization include:Capital Abeja, Capital Semilla and Creación y Fortalecimiento de Cooperativas While in term of financing initiatives, instruments like Fogape Chile Apoya, and venture capital funds supported by Corfo are some of the programs implemented during this period.8 Some financing measures are implemented jointly with BancoEstado9.
Finally, regarding the efforts that have been made in terms of financing, the creation of an agency focusing exclusively on financing investment projects -Agencia de Financiamiento e Inversión para el Desarrollo (AFIDE)- has been discussed in the congress and is expected to be approved in the following years.
Notes: ***Following the standard of quality for economic survey estimates published by the National Institute of Statistics of Chile, the estimates of the utilization rate are considered ‘poorly reliable.’ For more details about the methodology used, please refer to the following link: https://www.ine.gob.cl/sala-de-prensa/prensa/general/noticia/2024/01/26/ine-presenta-documento-est%C3%A1ndar-para-la-evaluaci%C3%B3n-de-calidad-de-las-estimaciones-en-encuestas-econ%C3%B3micas
During 2024, the world economy reacted to rising recession risks in the U.S., combined with geopolitical tensions, political uncertainty, and the increasingly strained trade relations between the U.S. and China, which led to a depreciation of most currencies against the U.S. dollar during the period.
On the domestic front, Chile's GDP grew by 2.6% in 2024, mainly driven by an increase in mining exports. Although investment declined by 1.4%, and consumption recorded a growth of just 1.0%.
Chile’s labor market showed mixed signals. The unemployment rate fell slightly to 8.5% yet remained above the pre-pandemic level of 7.2% recorded in 2019. Labor informality continued to pose a structural challenge, particularly among women, with informality rates reaching 28.4%, compared to 24.8% among men.
Bank credit remains more restrictive compared to previous cycles, although conditions appear to have improved in 2024 relative to 2023. Both short-term real interest rates and long-term rates remain high by historical standards. Long-term rates have experienced smaller declines than their international counterparts, contributing to a widening interest rate differential with the United States.
Shorter-term rates, such as commercial and consumer lending rates, have begun to reflect the monetary policy rate cuts. The restrictive behavior of bank credit can be attributed to tight external financial conditions, the stance of domestic monetary policy, capital requirements, and heightened perceptions of banking sector risk.
To categorize the size of firms, the Internal Revenue Service (SII) provides a size classification using the total annual sales of firms. Particularly, firms size classification is produced using annual sales of companies registered in the SII and considers five categories. The classification is detailed below in Table 2.
Note: Firms categorized as "no sales" correspond to taxpayers whose declared tax information does not allow them to determine an estimated amount of sales.
UF (Unidades de Fomento) is an adjustable monetary unit that is daily updated according to the consumer price index. As of December 31, 2023, 1 UF is equivalent to CLP 36 789.36 or USD 38.64
According to SII records, MSMEs constitute 98.6% of the firms for the tax year 2024 but accounts for 12.6% of total annual sales, in UF10. This information is summarized in Table 3.
Source: Internal Revenue Service (SII), tax year 2024.
On the other hand, in terms of the geographical distribution of the firm’s headquarters, the Metropolitan region is the one that concentrates the largest number of MSMEs, with 507 739 (42.5%), followed by the Valparaíso region (9.7%) and the Biobío region (7.4%) in 2024.11
The data indicates that the outstanding debt of SMEs and the share of the outstanding stock of SME loans to the total loans increased between 2023 and 2024. Specifically, SMEs loans increased from CLP 26.2 billion in 2023 to CLP 26.9 billion in 2024, and the share of stock increased from 19.6% to 20.7% during the period.
The stock of new business loans increased in 2024, from CLP 92 billion to CLP 104.3 billion, of which CLP 6.2 billion are earmarked for loans to SMEs, representing a share of 5.9%. Therefore, both the amount and the share of new business loans for SMEs increased.
On the other hand, short-term loans for SMEs increased by 48.9% in 2024 compared to the previous year (compared to a decline of 16.7% in 2023). The increase in the stock of loans is partly attributable to the support granted by Corfo, who offers several financial instruments, among which are the Risk Coverage Guarantee Funds, further covered in the Government policy response section.
In terms of the financial access to credit of MSMEs, the results from the” Banking Credit Survey” of the Central Bank of Chile (BCCh), shows that in the fourth quarter (Q4) of 2024, conditions for the supply and demand of credits remained limited, although they were moderately less restrictive than in the Q4 of 2023.
Interest rates for SMEs increased from 10.8% in 2023 to 10.95% in 2024, however interest rates are lower than rates in 2022. This increase in 2024 can be attributed to a combination of factors related to credit risk, financial market conditions and macroeconomic factors.
Meanwhile, perceptions of credit demand by companies show mixed signals: the percentage that considers a stronger demand increases from 15.4% in 2023 to 28.6% in 2024. As for SMEs, the proportion of banks reporting weakening demand decreased from 36.4% in 2023 to 9.1% in 2024, while the share of banks reporting stronger demand decreased from 18.2% in 2023 to 9.1% in 2024. The majority of banks report unchanged level of demand for new SME credit.
To date, SMEs have many more options than in the past to obtain quick liquidity at low cost, as the factoring industry has evolved to provide more favorable alternatives to SMEs. Currently, more than 100 alternative finance providers offer financing to over 20 000 companies. The factoring market is dominated by three major entities: The Banking Factoring Association (ACHEF A.G.), the Non-Banking Factoring Association (EFA A.G.) and the Chilean Commodity Exchange (BPCl)
The stock of factoring operations remained stable between 2022 and 2024, reaching around CLP 5.4 billion in stocks, compared to an increase of15% between 2021 and 2022.
On the other hand, leasing services offered in Chile include real estate leasing, leasing of movable property (machinery, vehicles, computer equipment, medical equipment, etc.) and subsequent leasing services.
The Chilean Commodity Exchange (BPC)12 is an entity regulated by the CMF, which provides the standards and systems for companies to trade products and invoices. Among other things, the BPC prepares and shares information on the payment terms of firms with their suppliers, to encourage sustained financing and promote greater certainty in the payment processes to MSMEs. In the fourth quarter of 2024, the average payment term to SMEs was 43 days, the same as the average of 2023. Since 2019, the trend has been declining in this indicator.
In 2023, the Superintendence of Insolvency and Re-entrepreneurship (Superir13) worked on the publication of law N°21.563, which improves previous efforts done in terms of modernisation of insolvency proceedings with the law N° 20.720 in 2022. Particularly, the law introduced simplified procedures for micro and small enterprises, allowing debt renegotiation for self-employed individuals who issue fee invoices, among other amendments.
Total non-performing loans show an increase in 2024. Despite being at low levels in historical terms, non-performing loans increased from 2.4% in 2023 to 2.6% in 2024 for all companies. SMEs increased from 4.6% in 2023 to 4,7% in 2024.
Regarding the efforts that have been made in terms of financing, Ministry of Economy, Development and Tourism has promoted the creation of an agency focused exclusively on financing investment projects, named Agencia de Financiamiento e Inversión para el Desarrollo (AFIDE). The agency has been discussed in the congress from 2024 and is expected to be approved in the following years. It is estimated that over 450 thousand companies will benefit in the first five years of AFIDE.
This agency will be established from Corfo’s14 current Investment and Financing Division and incorporates recommendations from the World Bank and international best practices. Specifically, the initiative aims to increase the availability and diversity of financing instruments, enabling companies of all sizes to undertake innovation and/or technology adoption projects. As an example of what AFIDE is expected to promote, we can mention:
Promoting “Green Finance” for sustainable growth: Enhancing access to financing for environmental and clean technology projects.
Promoting startups growth: Through policy instruments designed to foster the venture capital industry, which will facilitate access to financing for startups across all stages of development.
On the other hand, the implementation of ChileApoya Plan programme released in 2022 to support the people and sectors most affected by the pandemic and the global economic impacts that followed, continued in 2023 and 2024. Particularly, through instruments aimed at facilitating access to financing to unbanked MSEMs. Specifically, Fogape is the instrument designed to fulfill this goal through financing work capital, refinancing and investment with guarantees of up to 95% for microenterprises, 90% small and 85% for medium, with a maximum rate of TPM15 + 7,2%.
Publication of Law N° 21 673 that extends the duration of the program until December 31st of 2024.
Publication of the Exempt Administrative Decree16 No. 24317 by the Ministry of Finance of Chile amends the program’s regulations. The most notable changes include:
One of the firm’s registered (at the SII) economic activities must be in the list specified in the decree.
Firms which are affected by a natural catastrophe or emergency during 2024 and appears the Ministry of Economy’s cadastre can apply to Fogape.
Corfo financing programmes are aimed at expanding access to credit for MSMEs and unbanked cooperatives. In 2024, the guarantees programs granted by the Corfo, such as COBEX, Pro Inversión, FOGAIN, FOGAIN Mujer and Escala Pro-Inversión benefited almost 23 000 companies, reflecting an increase of almost 30% compared to the same period in 2023, granting credits for more than USD 1.3 million during the period. Particularly, almost 86% of these grants were allocated to micro and small firms.
However, even though venture capital funds, supported by Corfo’s programs, continue to be an important source of financing for technology-based companies with high growth capacity, during the last two years record a significant drop over the period of 24% (2023) and 39% (2024), respectively.
In the case of non-bank financing, in 2024, the Corfo MiPymes Credit Program allowed 121 000 companies to access financing through non-bank financial institutions, mobilizing almost USD 252 million in credits, factoring and leasing.
References
Central bank. (December 2024). Bank Credit Survey for the fourth quarter of 2024.
Central bank. (December 2024). Monetary Policy Report.
Chilean Ministry of Finance. Public Finance Report (third quarter) 2024
Corfo. (December 2024). Public Report of Corfo Guarantees.
The World Bank in Chile Overview: https://www.bancomundial.org/es/country/chile/overview.
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← 1. The information contained herein comes from background information obtained from the various actors involved in the financial ecosystem of SMEs.
It is expressly stated that the Ministry of Economy, Development and Tourism does not assume any responsibility for the veracity of the data with which the study or statistics has been prepared, so it does not grant any guarantee regarding those with regard to the accuracy, validity or integrity, nor does it assume responsibility of any kind for the use or application made of the aforementioned information.
← 2. This indicator excludes firms with no information about sales from the universe of firms (it also excludes informal entities).
← 6. Information from administrative data of Sercotec.
← 7. Information from administrative data of Corfo.
← 8. Please refer to the following link for further information: https://chileemprende.economia.gob.cl/
← 9. BancoEstado is a public entity (bank) that works with autonomy, legal personality, and its own assets. It operates on a permanent basis and is subject to the exclusive supervision of the Financial Market Commission (CMF)
← 10. UF (Unidades de Fomento) is an adjustable monetary unit that is daily updated according to the consumer price index. As of December 31, 2023, 1 UF is equivalent to CLP 36 789.36 or USD 38.64
← 11. In accordance with the SII business registry from 2024 tax year.
← 13. https://www.superir.gob.cl/
← 14. Corfo (Corporación de Fomento de la Producción) is a Chilean government agency whose purpose is to drive the country's productive and economic development. It provides support through subsidies, loans, and guarantees to foster entrepreneurship, innovation, and competitiveness among businesses at different stages of development.
← 15. Monetary policy rate.
← 16. It does not require prior Comptroller approval.