The New American Dream: Achieving Financial Resilience in the Latino Community

“Entrepreneurship is in our DNA. My grandfather had a farm in Puerto Rico and when our family came to the US, all his kids started businesses,” said Raymond Lamboy, president & chief executive officer of the Latin American Economic Development Association (LAEDA), a Camden based non-profit dedicated to helping minorities open small businesses. On the surface, that rings true – a recent study from Stanford University found that over the past 10 years, the number of Latino business owners grew by 34%, compared to a much more modest 1% for all business owners across the United States.

This trend is hardly surprising, since as Mr. Lamboy puts it, “Latinos are on track to being the majority minority community in the next few decades.” Data from the 2020 census shows that Latinos account for 51.1% of the US’s population growth in the past decade. Yet for all this growth, there are still some significant barriers to the community reaching broader financial resilience. “One major challenge is the legacy adoption of alternative financial systems. Grandparents use cash to get money orders to pay their bills instead of relying on mainstream financial systems. There’s a huge lack of trust in banks,” said Mr. Lamboy.

When asked about potential solutions, Mr. Lamboy called for more culturally competent financial education and products. “It’s not enough to just translate something into Spanish. It’s really about understanding the culture of the Hispanic community, which is not a monolith. As a Puerto Rican, my culture is different than the Colombian culture or the Mexican culture, and so on.” For example, he said, “In many Latin American countries, a notary public has the same stature as a lawyer.” That lack of understanding can affect their finances. “Business owners will go to a bookkeeper who is also a notary and think ‘I can trust this person, they must know what they’re doing,’ but that’s not always the case here.”

While Mr. Lamboy notes that more cultural sensitivity training at banks and other institutions has been helpful, some negative stereotypes still hold. “There can be an assumption that someone who is Latino walks into the bank, and maybe isn’t dressed as well, and they think ‘well they must not have any money,’ but that’s not always the case – they may have $100,000 in the bank.” And while many banks now have more Latino employees, Mr. Lamboy sees them most often in low-to-moderate income community branches. Mr. Lamboy emphasizes: “We’re not just a low-to-moderate income community.”

As the Latino population in the US grows and matures, new issues are arising. For instance, second or third-generation Latinos are requesting primarily English language education, whereas their parents or grandparents may prefer Spanish language options. Additionally, they’re facing some of the same broad issues as other young Americans. “I came out of school in the nineties, and back then only medical and law students were leaving with $60,000 to $100,000 in debt. Now typical bachelor’s degree students are incurring $100,000 loans,” Mr. Lamboy said. “So now, a lot of young Latinos are re-thinking the value of a college education. More students are looking at trade school as a way to make a living, which is great, but there are still really smart kids out there who would thrive in college who can’t afford to go. It’s becoming inaccessible.”

But Mr. Lamboy still sees entrepreneurship as a major force for prosperity in the community. “When you come to the US, there’s limited opportunities, but if you start a business, you can make your own opportunities – and sidestep some of the racism.” He notes though, that access to capital is the biggest barrier to Latino entrepreneurship. That’s why LAEDA has programs like the Smart Start Capital Fund, which provides microloans and financial education to minority business owners, a program in which Clarifi is a partner. “Our entrepreneurs have some really great ideas, but their credit keeps them from accessing capital to expand their business.”

Clarifi’s proud to be working with LAEDA to serve the Hispanic/Latino community and will continue to do so. As Mr. Lamboy puts it, “it’s critical that Latinos have access to the best financial information possible, because soon they will be driving the economy.”

Learn more about LAEDA at