The vulnerability trap: a challenge for Latin America’s development

Have you heard about “development traps”? According to the 2019 edition of OECD’s Latin American Economic Outlook Report, the social and economic progress experienced by the region has also brought increasingly complex challenges. Among them, the think tank has identified the “social vulnerability trap”

The report’s analysis show that  around 40% of the population has managed to escape poverty. However, since growth was achieved through precarious employment, their incomes are usually low and unstable in nature. This group lacks capacity to save and invest either in a productive activity or in their own human capital. The OECD shares that this trap gives way to a vicious cycle when left unaddressed, therefore causing a decline in the individual’s standard of living, likewise affecting his household’s well-being.

This reality is part of BBVA Microfinance Foundation’s fundamental purpose. Through its six institutions in five Latin American countries, it creates opportunities so that entrepreneurs living under vulnerable conditions could have access to financial services to develop their livelihoods, contributing to their progress.


'Latin American Economic Outlook 2019'