Financial sector development – financial services for all

An African woman sits at a table on which several mobile phones are lying and transfers numbers into a table.
Digital technologies play a central role in the development of the financial sector in developing countries. © John O’Bryan, USAID

A stable and efficient financial system is central to a well-functioning national economy.  Providing poor households, smallholder farmers and small enterprises with improved access to financial services can boost their involvement in economic life and reduce their vulnerability.

The SDC’s focus

The SDC has been active in financial sector development since the 1970s as an important strategy in poverty reduction. It focuses its efforts on promoting access to a range of client-centric, responsible and sustainable financial services for low-income households, smallholder farmers and small enterprises. The SDC also works to improve the financial inclusion of poorer households, i.e. their integration into the country's existing financial sector.

The SDC has long considered the promotion of savings to be a key first step in the financial integration of people with low incomes. It is therefore increasingly focusing on developing markets for agricultural insurance and disaster insurance schemes together with global reinsurance companies in order to break through this final barrier in financial integration.

To this end, the SDC prioritises the following:

  • For the clients: training courses for SDC target groups in general financial education with the aim of ensuring savings, insurance and credits and, thereby, also making access to institutional financial services easier.
  • For the service providers: support for financial institutions that have the capacity and willingness to build up their range of services for SDC target groups over the long term and in a cost-effective manner.
  • In terms of bolstering the financial sector, the SDC supports what are known as financial market infrastructures – a network of financial institutions or training centres, for example.
  • If certain conditions are restricting the positive development of a country's financial sector, the SDC relies on the support of and works together with legislative, regulatory and supervisory institutions.
  • The SDC plays an active role in international centres of expertise and networks such as the Consultative Group to Assist the Poor (CGAP) and the Social Performance Task Force (SPTF). Such organisations also help promote innovations and integrate relatively new topics such as digital technologies. The aims are to improve international coordination and harmonisation, exchange knowledge and experience, and support global and regional networks.

Background

A well-functioning financial sector is central to a country's economic development.  It offers the opportunity to mobilise savings to make productive investments. Providing private households and farmers as well as businesses with secure investment opportunities, access to payment transaction systems, credit and insurance services is essential in order to reduce income risks, achieve a more effective cushion against economic and market fluctuations and save for investments. Such investments can provide the basic foundation for an independent existence or for children's education. Crop and disaster risk insurance help smallholder farmers reduce their risks, which in turn increases their food security. An efficient financial sector accessible to all segments of the population has the effect of reducing poverty, both at the private household level and from the standpoint of the national economy. It also stimulates economic growth at all levels.

Current challenges

At present, poor people in many developing countries are largely excluded from the traditional financial system. They cannot open a savings account at a bank or apply for a small loan, for example. This is particularly true of rural regions, where the majority of the population have no access to such formal financial services.  Typical reasons for this deficiency are a lack of sales and service offices, high costs, insufficient infrastructure, services that are not geared to specific needs, and inadequate legal and regulatory frameworks.

As a result, poorer members of the population often have to resort to relatives, friends and other informal money lenders.  That is why the SDC works in financial sector development – to create enduring financial services for broad sections of the population who have so far had only limited, if any, access to such services.

The SDC also invests in new partnerships with the aim of attracting socially responsible commercial investors and works with other partners such as (local) commercial banks, insurance companies, leasing agencies and venture capital providers.

Microfinance

Financial services for poor sections of the population and microenterprises who have no regular access to the services offered by formal financial institutions.

Small enterprise finance

Small enterprises are of major importance in achieving broad-based development and employment. Yet often such enterprises have no access to services tailored to their needs.

Rural finance

Despite the major role they play in economic development, rural regions suffer from a massive deficit of financial services.

Micro-insurance

People in developing and transition countries tend to be exposed to a wide range of risks, such as disease, harvest failure, loss of income and theft, yet they have virtually no formal insurance protection.

Current projects

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Schools for Health (Shkollat për Shëndetin)

01.05.2025 - 31.12.2027

Nearly one third of the population in Albania is smoking, overweight or suffers from high blood pressure. Adopting healthy behaviours is crucial to combat non-communicable diseases. In the exit phase, the Ministries of Health and of Education will strengthen coordination mechanisms for health promotion in schools. Schools’ staff and healthcare professionals will implement jointly local action plans. Children, parents and communities will increasingly adopt healthy behaviours.


Programme d’Appui aux Organisations et Populations Pastorales (PAO2P3)

01.05.2025 - 30.04.2029

La Suisse soutient les populations pastorales afin qu’elles accèdent à des formations de qualité et à des opportunités d’emplois. Ces populations sont marginalisées par les politiques nationales et ré-gionales. Le programme PAO2P-3 vise la formation et l’emploi des jeunes (agro)pasteur-e-s dans les zones transfrontalières entre le Burkina Faso, le Bénin, le Mali, le Niger et le Togo. Il renforce leur résilience économique et contribue à réduire leur marginalisation et les conflits.


Fostering the economic resilience for small-scale female farmers in Samegrelo and Abkhazia through Farmer Field Schools

01.04.2025 - 31.03.2029

Switzerland  is  committed  to  support conflict  transformation in Georgia including  in the  break-away  region  of  Abkhazia.  Working  on  socio-economic  issues  affecting small-scale  female farmers in  Abkhazia  and  the neighbouring region  of  Samegrelo,  the  proposed  project  will enhance their agricultural and business skills, focusing on dairy, fruit, and vegetable production, processing and marketing. This should lead to increased incomes and reduced poverty rates.  


NRC : Education en situation d’urgence

01.04.2025 - 31.03.2029

Le Mali traverse une crise complexe et prolongée privant près de 600’000 enfants de protection et de leur droit fondamental à l’éducation. Déscolarisés, ils sont exposés à des risques accrus. Ce projet offre à plus de 24’000 enfants vulnérables des régions de Bandiagara, Douentza, Mopti et Tombouctou une opportunité éducative adaptée dans un environnement sûr et protecteur. Le renforcement des capacités éducatives et de gouvernance bénéficie à plusieurs milliers d’autres.


Core Support to Ifakara Innovation Hub

01.04.2025 - 31.12.2028

Despite Tanzania's recognition of job creation, research and innovation as national priorities, skills and funding remain limited due to competing demands for public resources and infrastructure challenges. This contribution aims to provide catalytic financial resources to strengthen the Ifakara Innovation Hub (IIH), a nascent rural collaborative space to foster innovation, entrepreneurship, and community-driven solutions.


Protection and emergency care for vulnerable and unaccompanied minors

01.04.2025 - 31.07.2026

The number of migrants transiting through Bosnia and Herzegovina remains high with more than 25% of them being unaccompanied minors in need of essential care and special protection due to their vulnerabilities. As the state system is not yet able to fully address their needs, assistance from external actors remains crucial to provide adequate support to this vulnerable group of migrants and to safeguard their rights.


Reducing risk-factors for Non-Communicable Diseases in Ukraine (Act for Health), phase 2

01.03.2025 - 28.02.2029

Non-communicable diseases represent the most significant health problem in Ukraine and the situation worsened as a result of Russia’s military aggression. This disease burden threatens the country’s resilience, development, its human capital, and the capacity of its healthcare system. The Act for Health project is a flagship Swiss engagement that addresses the chronic disease burden through tailored and innovative approaches at all government levels, thereby supporting Ukraine’s recovery and reform path.


SER Culture for Democracy

01.03.2025 - 31.12.2028

Independent culture & arts are strong drivers for improved social cohesion, tolerance and democratic practice at the local level. Building on this potential CfD will support quality cultural and artistic initiatives, mainly outside of urban centers. Strengthening the resilience and strategic focus of independent cultural actors will open up more spaces for critical thinking and reflection and ultimately contribute to stronger foundations for social cohesion, tolerance and democracy in Serbia.


Smart Packaging Waste Management

01.03.2025 - 28.02.2029

Improper  waste  management  is  widespread  in  North  Macedonia  and  a  pressing  environmental  issue  threatening public health and environment. To address it Switzerland engages with Pakomak to enhance the effectiveness,  efficiency and  transparency  of  its packaging waste  recovery system1 through  digitalization and modernization of packaging waste selection2, collection, sorting, transportation and recycling. These efforts will significantly decrease the amount of waste disposed in landfills and contribute to the Green Agenda. 


Contribution à l’appel éclair de UNHAS Haiti 2025

28.02.2025 - 31.12.2025

Haiti fait face à une crise prolongée. L’accès des acteurs humanitaires aux territoires se rétrécit. Depuis novembre 2024, les vols commerciaux desservant Port-au-Prince sont arrêtés jusqu’à nouvel ordre. Les populations en besoin d’assistance augmentent. L’appui du bureau humanitaire facilitera des ponts aériens pour un accès vital aux populations affectées, le déploiement du personnel, le transport de biens vitaux et des évacuations médicales.


Kyrgyz Republic: Water Supply and Sanitation Universal Access Program (WASUAP)

20.02.2025 - 31.12.2029

The project will enhance the universal and sustainable access to water and sanitation in the Kyrgyz Republic by establishing a new sector of professional water service providers in the rural area and by building their capacities. This institutional reform will be accompanied by investments in the construction and upgrade of water supply systems and sanitation infrastructure in unserved and underserved settlements.


JIGITUGU+: Appui au renforcementd es competences des jeunes femmes et hommes ruraux dans le secteur agricole

01.02.2025 - 31.12.2028

A travers ce projet intégré, la Suisse veut contribuer à relever les défis des zones rurales du Mali en mobilisant les ressources locales. Il vise à renforcer la résilience, promouvoir l’éducation et l’emploi des jeunes et des femmes, et améliorer la sécurité alimentaire. En intégrant ces publics dans des systèmes éducatifs, professionnels et agricoles adaptés, le projet aspire à un impact durable, notamment par l’augmentation des revenus, la promotion de pratiques agroécologiques et le renforcement des institutions locales.

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