IDB Approves $100m Loan to Boost Innovation and SME Productivity in Peru

The program aims to increase private and public investment in innovation, finance the scaling up of new ventures, and reduce technological gaps among MSMEs.

The Board of Executive Directors of the Inter-American Development Bank (IDB) has approved a $100 million loan to strengthen business productivity in Peru by expanding investment in innovation and supporting the growth of innovative enterprises across the country. The initiative targets long-standing productivity gaps that limit the competitiveness of Peru’s micro, small, and medium-sized enterprises (MSMEs).

The program aims to increase private and public investment in innovation, finance the scaling up of new ventures, and reduce technological gaps among MSMEs. It also seeks to catalyze greater private financing for innovation and ensure that support reaches firms in all regions of Peru, not only major urban centers. By improving access to technology, skills, and financing, the program is expected to help raise the productivity of small and medium-sized firms, which currently lag far behind large companies in Peru and their counterparts in OECD economies.

This operation is the second individual loan under the Conditional Credit Line for Investment Projects (CCLIP) known as the Sectoral Innovation Program. The CCLIP framework supports a multi-year, nationwide effort to strengthen Peru’s innovation ecosystem, improve firm capabilities, and foster sustainable productivity growth.

The initiative is expected to benefit more than 135,000 MSMEs with the potential to invest in innovation, alongside around 5,000 innovative startups. Support will include grants and financial instruments for research and development, technology adoption, digitalization, and process improvements, as well as technical assistance to strengthen managerial and innovation capabilities.

Implementation will be led by Peru’s Ministry of Production through the National Program for Technological Development and Innovation (PROINNOVATE). The program aligns closely with the IDB Group’s Country Strategy with Peru for 2022–2026, which emphasizes productive development, environmental sustainability, and digital transformation as key drivers of inclusive growth.

In addition to productivity gains, the program is expected to contribute to job creation, greater formalization, and improved competitiveness of Peruvian firms in domestic and international markets. By fostering innovation across sectors and regions, the initiative aims to support a more diversified and resilient economy.

The IDB loan will have an amortization period of 17.6 years, including a grace period of seven years, and will carry an interest rate based on the Secured Overnight Financing Rate (SOFR). The program also includes a local counterpart contribution of $22 million, bringing total financing to $122 million.