In trying times, Latin American enterprises are working to fill gaps

Similar to what we’re seeing in Spain and in the United States, the region’s political polarization tends to divide many countries roughly in half. In Latin America, we see populist leaders from the left, like Daniel Ortega of Nicaragua or Andrés Manuel López Obrador of Mexico, and from the right, like Brazil’s Jair Bolsonaro. Citizens don’t seem to have much hope that the next elected leader will be any better.  

As such, institutions seem extremely fragile now. Democratic elections don’t seem to be enough to fix all the problems that need fixing and even may open the open the door to antisystem forces like Milei in Argentina. In this context, how can one be optimistic? Can the private sector still be a source of hope?  

Beyond commercial (or financial) goals 

In the current context, to run a successful business, you need to bring solutions that sometimes go beyond the traditional commercial realm. Latin American businesses usually need a social license to operate. If a corporation is seen as exploitative, it needs its own private army to “defend” itself. A much better approach is to get stakeholders’ buy-in. I should clarify that, in reality, some companies are still exploitative, taking advantage of the region’s confusing, and many times lax regulations to come in and take what they want. But, at the same time, many companies choose to operate in a way that’s compatible with ESG or sustainability aims. And these are the companies, I think, that Europe’s investors should be interested in because they are growing quickly, doing good and making a profit. 

Three interesting sectors to watch are healthcare, education, and finance — that is, financial inclusion. An example I like is the fintech startup Stori, from Mexico, which offers credit cards to people who had previously been excluded from this convenient payment means. Founded in 2018, Stori is already a unicorn, with a valuation of over $1 billion.   

At the same time, Brazil is also home to several successful startups, including Nubank, a digital bank that has raised more than $1 billion in funding and brings intuitive financial solutions for individuals as well as small and medium-sized enterprises (SMEs).

Colombia’s Symplifica has built a digital platform to help domestic workers and employers in Latin America with payroll management and social security, as well as other benefits and legal issues. It helps reinforce growing recognition by the region’s governments of the rights of domestic workers and strengthens worker protections across the sector. Quipu Market, with founders from Colombia and Argentina, provides an online platform that empowers individuals and budding entrepreneurs – predominantly women, who make up 80% of the customer base – from economically disadvantaged communities to engage in commerce using virtual tokens. With its accessible mobile and web platform, it offers microbusinesses a chance to enhance their visibility and establish creditworthiness, even in the absence of conventional banking access.