From SOCAP21: How Latin America’s Social Entrepreneurs are Creating a New and Better Innovation Economy
No longer just emerging, the Latin American market is growing and leading. The first half of 2021 saw record-breaking activity with nearly $10 billion invested in 414 startups, double the pace of 2020. That sets the stage for LatAm entrepreneurs to help address pressing societal issues across financial services, agriculture, health care, and more.
During SOCAP21, Village Capital and Moody’s Latin America shared how their organizations are supporting this transformation by increasing access to capital and other supports for entrepreneurs who in turn are energizing local economies and inspiring others in their communities.
Daniel Cossío, Regional Director – Latin America for Village Capital, says the organizations launched the Finance Forward initiative to ensure that services are available for entrepreneurs who historically have been excluded from the financial system, especially minority communities. The initiative also focuses on building networks of support in Latin American countries that are informed by people who understand the local context.
“It is about access, about creating equal opportunities. We want to make it equitable for entrepreneurs to grow their business and open more networks for them to attract investment,” he says. “The most important part of Finance Forward is trying to expand the concept of financial health and supporting individuals and families so they can invest and save and grow their finances.”
Cossío says entrepreneurs especially appreciate the analyses that Moody’s provides through the program as it helps them identify risks and other areas for improvement.
Improving transparency and access to capital markets in Latin America are two primary reasons why Moody’s joined the Finance Forward initiative, says Marina Rosemberg, AMD – Head of LatAm Commercial.
“We’ve learned there is so much potential and opportunity and creativity that we’re not aware of,” she says. “It helps us understand the products we need to develop to serve these markets and these companies. … To rethink our business to be able to serve not only well-established companies, large companies but also smaller, startup companies.”
While Latin America has room to improve access to capital and other opportunities for entrepreneurs, Rosenberg says the region is home to entrepreneurs with great ideas, capabilities, and talent.
“This is a region that has been threatened repeatedly by microeconomic imbalances. This is also a population that cannot access traditional ecosystem of payments,” she says. “The impact of any solution to better position these underserved people is huge. It’s important to share the good vibes and make sure the entrepreneurs get the motivation that they need.”
Matt Zieger, Chief Program Officer, Americas at Village Capital, agrees that some sections of the Latin American economy continue to have an informal nature.
“It’s a very two-tiered society,” he says, noting that more than half of the population is underbanked. “There is huge demand and a need for innovation that improves lives, that changes the way that businesses are created or formed.”
That potential opportunity is a large reason why the Latin American market is attractive for investors, Zieger says.
“It’s no longer emerging; it certainly has emerged,” he says. “One part of our approach is to make sure there is access, creating pathways … and really finding and seeking out connections to smaller communities with underserved entrepreneurs.”
Watch El Futuro es Latino: How Latin America’s Entrepreneurs are Creating a New and Better Innovation Economy
Daniel Cossío, Regional Director – Latin America for Village Capital
Marina Rosemberg, AMD – Head of LatAm Commercial, Moody’s
Matt Zieger, Chief Program Officer, Americas, Village Capital
Jennifer Stula Rivera, Vice President – Corporate Social Responsibility, Moody’s