70% of Guatemala’s economy operates informally, limiting access to formal financing and hindering the scalability of businesses with social and environmental impact.
By JOSÉ ÁNGEL DE LA PAZ | EGADE BUSINESS SCHOOL
Guatemala has great potential for impact investment, with an expected 14% annual growth rate until 2030, but it faces structural barriers that limit its development.
A new study by EGADE Business School at Tecnológico de Monterrey and Red de Impacto LATAM identifies the key challenges of the country’s impact ecosystem. It highlights the importance of strengthening stakeholder collaboration to channel financial resources into projects with social and environmental value.
Titled "Building Impact Ecosystems in Latin America – The Case of Guatemala", the study was conducted by Felipe Symmes, research professor at EGADE Business School, and Bárbara de la Garza Martins, researcher and co-founder of Ushum Colectiva Creativa.
The research provides key insights to strengthen the impact ecosystem, which consists of international organizations, accelerators, entrepreneurs, SMEs, grassroots organizations, and public-private partnerships, and to mobilize more significant financial resources towards socially and environmentally valuable projects.
KEY FINDINGS: FINANCING AND STRUCTURAL CHALLENGES
Impact investment is an approach to actively address social and environmental challenges while seeking financial returns that align with impact objectives.
The study highlights the need to align impact ecosystem efforts with the United Nations’ Sustainable Development Goals (SDGs), particularly reducing inequalities (SDG 10), promoting sustainable economic growth (SDG 8), and responsible consumption and production (SDG 12), to guide impact investment towards more equitable and sustainable development.
"One of Guatemala’s biggest challenges is structuring accessible financial models for impact entrepreneurs, ensuring that investment is not only concentrated in large corporations but also drives the growth of emerging projects with high social and environmental value," Symmes said.
The study reveals that, although Guatemala leads the region in impact investment demand, it faces significant structural barriers that limit its potential.
Key challenges include:
• Political instability: Perceptions of political risk discourage international funds and restrict access to foreign capital.
• High economic informality: Around 70% of Guatemala’s economy operates informally, limiting access to formal financing.
• Fragmented market: The lack of solid business structures and high administrative costs make it difficult for impact-driven projects to scale.
• Limited familiarity with financial instruments: Many organizations lack awareness of alternative financing mechanisms, reducing their investment opportunities.
Despite these challenges, the report identifies strategic sectors with high investment potential, particularly in environmental sustainability and regenerative agriculture.
THE ROLE OF IMPACT ECOSYSTEM BUILDERS
According to the study, impact ecosystem builders are crucial in connecting key stakeholders—including entrepreneurs, governments, investment funds, and NGOs—to strengthen collaboration. The study identifies four main types of impact builders:
1. Educators and knowledge generators: Focused on training and capacity building for social and environmental impact.
2. Relationship and collaboration facilitators: Act as bridges between key sectors to foster strategic partnerships.
3. Capital and resource enablers: Connect projects with investors and funding sources.
4. Community builders and local change-makers: Work directly with communities to drive sustainable development models.
Symmes underscores the importance of strengthening the role of these ecosystem builders: "For the impact ecosystem to thrive, stronger partnerships between the public and private sectors are essential, along with better financial tools to help entrepreneurs scale their projects sustainably."
RECOMMENDATIONS TO STRENGTHEN THE IMPACT ECOSYSTEM
The report also offers recommendations to improve access to financing and create a more efficient impact ecosystem:
• Streamlining bureaucratic and tax procedures to facilitate the formalization of enterprises and cooperatives.
• Promoting internationalization strategies to help Guatemalan businesses compete in global markets.
• Establishing common impact assessment standards would enhance the ecosystem’s credibility and attract more investment.
• Strengthening pre-investment technical assistance through accelerators and incubators.
EGADE Business School reaffirms its commitment to sustainable development in Latin America through research that drives business transformation and builds more resilient and equitable ecosystems.
To explore these findings in depth, a webinar titled "Impact Ecosystems in LATAM: Lessons from Guatemala to Drive Regional Growth" will be held on March 19 at 4:00 p.m. (Guatemala and Mexico City time). Experts will discuss the study’s main results and analyze strategies to strengthen the impact ecosystem across Latin America.
Interested participants can register here: https://bit.ly/WebinarEcosistemasDeImpacto.