In spite of the introduction of laws this year to protect minority investors and to eliminate capital controls, levels of investment and trade volumes have remained low in Chile in recent months. It is thought that global stock market uncertainty and high rates of interest in the US have contributed to Chile’s economic distemper.
The reluctance of investors is impacting on small and medium sized companies as they are denied access to cheap capital. The repercussions for Chilean factors are not yet known, but it is likely that the capital starved small and medium sized companies may turn to alternative financing methods such as factoring to help them weather the storm.
