editorial

“Resilience, key to the future of entrepreneurs and small businesses”. Antoni Ballabriga, Global Head of Sustainability Intelligence & Advocacy at BBVA

Every company faces crises and difficult times throughout its lifecycle—moments that challenge its survival. For small and medium-sized enterprises (SMEs), their future depends not only on their current competitiveness but also on their resilience—their ability to recover from adversity. This need for resilience is particularly pressing in developing economies, where there is often a lack of sufficient support mechanisms from governments and institutions. 

The role of the financial sector is to open doors: to incentivize their entry into the formal economy and support them with solutions tailored to their realities and needs

Micro and small businesses form the economic backbone of many communities and face not only the typical challenges of economic sustainability that come with running a business but also the growing impacts of major risks like climate change, which are increasingly evident. Now more than ever, as financial institutions, we  have a responsibility—and an opportunity—to become strategic partners, helping to strengthen these businesses’ capacity to adapt and promote inclusive and sustainable growth while ensuring their long-term viability. 

Economic Resilience: More Than Just Numbers

The first line of defense for any business during a crisis is its financial health. But how can we ensure that a small business or entrepreneur can withstand the impact of a financial shock? The answer lies in something as fundamental as encouraging formalization. Many small businesses operate informally, leaving them more vulnerable and limiting their access to essential financial tools like credit, insurance, or even savings accounts. The role of the financial sector is to open doors: to incentivize their entry into the formal economy and support them with solutions tailored to their realities and needs.

Formalization, however, is only the beginning. It is also essential to promote financial education programs that help SMEs better manage their cash flow, plan investments, and handle debt responsibly. Together with tailored financial solutions, microinsurance, and savings accounts, these programs create a comprehensive support system that reinforces stability and their capacity to respond to unforeseen  events. This is the commitment of the BBVA Microfinance Foundation (BBVAMF) and BBVA in all the markets where we operate.

Climate Resilience: The Challenge of the Century

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Antoni Ballabriga Global Head of Sustainability Intelligence & Advocacy at BBVA

According to the World Economic Forum, more than half of global GDP depends significantly on natural capital—essential resources like forests, water, and soil, which are rapidly declining due to climate change. This is compounded by the increasing frequency and intensity of extreme weather events such as droughts, floods, heatwaves, wildfires, and cyclones. In 2023, the economic losses caused by these disasters worldwide exceeded $290 billion. In Latin America and the Caribbean,  according to Swiss Re, only 32% of these costs were covered by insurance, leaving communities and economies even more exposed.

These climate-related risks have an even more profound impact on precisely these  emerging economies in Latin America. A lack of infrastructure, combined with greater exposure to both climate and economic risks, creates an especially challenging scenario for small businesses. This is evident in key sectors such as agriculture, tourism, and manufacturing, where SMEs play a crucial role. These industries, which are vital to many local economies, face challenges that threaten not only their sustainability but also the indirect well-being of the communities that depend on them.

Faced with this reality, financial institutions have the challenge - and the duty - to act. How can we do this? First, by raising awareness and providing training. Many entrepreneurs are unaware of how climate change directly affects their businesses or what measures they can take to adapt. Our role is to equip them with the knowledge and tools to manage these risks, benefiting both their businesses and the communities they serve.

Additionally, an increasing number of financial institutions are offering credit solutions with pricing incentives tied to sustainable and resilient practices. A noteworthy example is the "Crediverde Adaptación" loan offered by Banco Adopem, the microfinance institution of BBVAMF in the Dominican Republic. This initiative demonstrates how financing can be a powerful tool for fostering sustainability and resilience. Similarly, BBVA is financing SMEs to develop regenerative agricultural practices and implement efficient water management systems. No less important, climate insurance products -such as parametric insurance- are gaining prominence, offering immediate coverage against specific events. These products not only minimize losses but also offer peace of mind and stability to entrepreneurs who rely on predictable weather patterns to operate.

In conclusion, resilience is not a destination; it’s a path that is built throughout the life of the companies. And on that journey, financial institutions have a responsibility to be reliable, innovative and committed partners. Let us continue working to ensure that small businesses remain the driving force of development and a catalyst for positive change in the world. As Nelson Mandela said, “The greatest glory in living, lies not in never falling, but in rising every time we fall.”