Changing the Ecosystem in Central America
Whenever people think of Central America, especially in regards to El Salvador, the first thing that probably comes to mind is gang violence or illegal immigration. As a former Peace Corps volunteer in El Salvador, it literally pains me to hear that the only news that comes out about a country that I know very well is the underbelly and darkest parts of it. There is so much more to El Salvador than extortion, illegal immigration to the United States, and murder rates. One of the ways in which El Salvador, and Central America as a whole, might be able to turn around its image and future could be through impact investing and social enterprise development.
The ecosystem surrounding social entrepreneurship and impact investing is still a nascent concept here in Central America. There are plenty of entrepreneurs and in the past 5 years, being known as an entrepreneur and starting your own business has changed and grown. In the past, saying that you were an entrepreneur here meant that you were unemployed; now it is worn like a badge of honor and everyone wants in on the action. The next big step that I see to this boom in entrepreneurship is a shift in thinking of just creating a for-profit business that creates jobs to one that goes beyond profit and reaches for social and environmental change as well. While this is starting to happen and gain momentum, there needs to be a coordinated effort between both the private and public sector to foster social entrepreneurs.
Last week I traveled to San Salvador to feel out the impact investment and social enterprise space and was surprised to find that there are a lot of organizations, consultants, and companies that are really excited about breaking into this space and supporting the development of this ecosystem. El Salvador has the potential to become the link between all Central American businesses but its entrepreneurs lack both business acumen as well as investment and access to markets. Organizations like USAID, Catholic Relief Services, BPeace, and Vital Voices are filling the gaps in terms of providing training, mentorship, and connections to entrepreneurs and are now starting to require a their accelerator participants to have a social or environmental component to their business models.
What they need now is to partner with impact investment companies who can help those social entrepreneurs get the capital they need to scale, and this is where we at Pomona Impact might be able to come in. Through creating partnerships with accelerator programs like the ones offered by Vital Voices, we can help support the next generation of social entrepreneurs and launch El Salvador out of the downward economic spiral they are finding themselves now. Social entrepreneurs in El Salvador, as well as Central America as a whole, need more attention, support, mentorship, and above all impact investment.