About the Inter-American Development Bank’s Social Entrepreneurship Program (SEP)

The Inter-American Development Bank began supporting income generating nonprofit organizations and cooperatives in 1978 through its Small Projects Fund long before there was a field dubbed social enterprises. In 1998, the Social Entrepreneurship Program (SEP), which replaced the Small Projects Fund, was created to promote social equity and the economic development of poor and marginal groups. The Social Entrepreneurship Program promotes business operations that generate social benefits and help community organizations encourage microenterprise development. Thus, in its 25-year history, the Bank has supported numerous projects that fall under the rubric of social enterprise through this program.

The SEP grants low interest loans of up to US$1 million; in addition, it offers technical assistance grants of up to US$250,000, which are allocated to the development and strengthening of innovative institutions. SEP uses its resources strategically and funds a limited number of representative projects; such operations must be capable of promoting learning between countries or of being emulated in other parts of the region.

IBD Social Entrepreneurship Program (SEP) Support to Social Enterprise

• Invests US$10 million annually to develop and strengthen innovative institutions.
• Provides low interest loans of up to US$1 million and grants of up to US$250,000 for technical cooperation.
• Supports financial services and business development projects with a special emphasis on poor and marginalized groups.
• Provides average long-term loans of US$500,000.

SEP is a highly competitive program, providing US$10 million annually to finance projects in 26 Latin American and Caribbean countries. Government agencies, bilateral funds, and multilateral donors have joined forces with IDB and the Social Entrepreneurship Program to strengthen that assistance. Several trust funds, such as the European Union Special Fund for the Financing of Small Projects in Latin America, the European Union Special Fund for Financing Microenterprise in Latin America, the Swedish Trust Fund for the Financing of Small projects, the Norwegian Fund for Small Projects, the Norwegian Fund for Microenterprise Development, the Japan Special Fund, the Swiss Technical Cooperation and Small Project Fund, and more recently the Italian Trust Fund have contributed, channeling support to rural and minority groups, and providing technical assistance to strengthen nonprofit organizations. The IDB Group is committed to contributing to the success of this new type of social enterprise and supporting projects that offer financial and business development services as well as social and community services in a sound, efficient, and sustainable way to benefit low-income people, indigenous groups, women, youth, and other marginalized groups.