Paraguay's MSMEs Face Hurdles, New Plan Aims for Economic Transformation

Micro, small, and medium-sized enterprises (MSMEs) are the backbone of Paraguay's economy, constituting 98% of all businesses and providing over 75% of the nation's employment. However, these vital entities continue to grapple with significant hurdles, including difficulties in formalizing their operations, securing adequate financing, accessing broader markets, and expanding beyond the Asunción metropolitan area.

A new strategic initiative, the 2026-2031 Entrepreneurship and MSME Plan, has been introduced by the Ministry of Industry and Commerce (MIC) in collaboration with Horizonte Positivo. This plan aims to transform the MSME sector into a key driver of Paraguay's productive transformation and foster an environment conducive to innovation and competitiveness.

Entrepreneurs shared firsthand accounts of the obstacles. Vanesa Farina, a health sector entrepreneur, highlighted the lengthy payment cycles in the private sector, often waiting six months for reimbursement, and the protracted public processes for business formalization, which can take over nine months. Similar challenges affect businesses across different sectors and regions, from a carpenter in Encarnación seeking to formalize to a cooperative in the Chaco region struggling to secure state contracts, and an entrepreneur in Ciudad del Este navigating complex permit requirements.

The new plan is structured around four core pillars designed to foster growth. "Intelligent formalization" seeks to streamline bureaucratic processes by interconnecting institutions and reducing redundant procedures. "Business development" focuses on providing training, technical assistance, and support through existing Business Development Centers. "Market access" aims to expand sales opportunities through public procurement, value chains, and international markets, emphasizing the underutilized potential of state purchasing quotas for MSMEs. Finally, "territorial development" is dedicated to extending economic opportunities beyond the capital region and strengthening regional ecosystems.