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

Object 1 – 12 of 1057

E-Governance for Accountability and Participation (EGAP), Phase 3

01.10.2024 - 30.09.2028

Digital transformation of Ukraine’s public administration significantly contributed to its resilience in the critical war conditions. Switzerland will consolidate its support to Ukraine in promoting innovative digital tools as amplifiers of democratic reforms in socially important sectors, catalysts of sustainable recovery and effective service provision to citizens and the private sector.


Moldova: Continuity of care in case of catastrophic health events – Care4Living

01.10.2024 - 30.09.2028

Switzerland will support Moldovan health authorities in reforming the emergency care system and in building rehabilitation services in order to ensure timely medical care in cases of medical and public health emergencies. The program will contribute to enhancing the chances to survival and recovery for patients who are at risk or have suffered catastrophic health events (stroke, heart attack, multiple trauma). The program will use the development of healthcare services as a vehicle to foster dialogue between Moldova and its breakaway region of Transnistria. 


Assistance en soutien psychosocial et protection intégrée pour les populations affectées par le conflit au Burkina Faso

30.09.2024 - 30.04.2026

Les populations déplacées internes au Burkina Faso, en particulier les femmes et les filles, sont exposées à des violations de leurs droits. Afin de contribuer à la protection de ces populations vulnérables, la Suisse soutient le projet de protection intégrée. Le projet vise à répondre à l’urgence et à appuyer les acteurs locaux (Etat, associations et communautés) dans la prise en charge des victimes et à réduire leur vulnérabilité en leur donnant des moyens de subvenir à leurs besoins.


Women’s Economic Empowerment in the South Caucasus (WEE)

01.09.2024 - 31.08.2026

Switzerland has been successfully supporting women and their businesses in Georgia, Armenia, and Azerbaijan since 2017. In this final phase of the project, Switzerland aims to institutionalize gender-related policies at national and local levels, build the capacities of the governmental and non-governmental partners to continue promoting women's empowerment and encourage the private sector to support more women in the formal economy.


Increasing Market Employability (IME)

01.09.2024 - 31.12.2026

North Macedonia’s economy is characterised by persistently slow growth rates as a result of low productivity due to outdated practices and scarce labour force due to high emigration. To address this, Switzerland, through its Increasing Market Employability project, supports small and medium-sized enterprises in sustainable agribusiness and tourism to become more competitive and environmentally sustainable by improving their products and services, while creating decent employment. The duration of the project is extended until 31.12.2026.


FAIRWAY - Interregional Programme to promote decent work for migrant workers from Africa to the Arab States

01.09.2024 - 31.05.2028

Decent work for low-income migrant workers in the Middle East is promoted, in sectors particularly prone to forced labor and exploitation, affecting increasingly African workers. Through improved services, access to justice and representation, migrant workers have their rights protected. Interregional and regional cooperation is promoted for improved labor migration governance and safe migration, thereby enhancing the development benefits for countries of origin and destination.


Andean Regional Initiative on Adaptation to Climate Change (ARIACC)

01.09.2024 - 31.08.2027

ARIACC aims to increase the resilience of Andean Family Agriculture to climate change by improving the implementation of relevant policies, building capacity, leveraging investments, scaling innovative practices and promoting regional and global knowledge exchange. Close multisectoral collaboration will ensure the sustainability and scaling of the initiative. The project builds on longstanding SDC experience in the region and consolidates successful achievements of Phase 1 while sharing them globally.


Swiss Support to Arts Development in Zimbabwe (SSADZA)

01.09.2024 - 31.08.2028

Through the SSADZA initiative, Switzerland will support Zimbabwean artists to create new work, build networks, and engage audiences, enriching the arts landscape economically and socially. The programme will stimulate social change and enhance civil society by promoting the arts and culture as a catalyst for debate, social cohesion, peaceful co-existence and localisation. SSADZA will also participate in policy influencing with donors and government for increased financial support to the sector.


Tajikistan UNDRR - Strengthening Resilience to Disasters and Climate Change in Tajikistan (SRDCT)

01.09.2024 - 28.02.2026

Tajikistan is highly vulnerable to natural hazards and climate impacts, thus strengthening resilience needed as fundament for sustainable development. The intervention will contribute to (i) sustainable and effective mechanisms and instruments to improve risk governance through the national DRR platform,  (ii) improved risk knowledge through robust loss data collection and recording, and (iii) preparedness measures through support to multi-hazard Early Warning Systems and risk information.   


Enhanced Protection and Support to the Most Vulnerable Children, notably Refugee Children, in Lebanon

16.08.2024 - 15.08.2027

Children of all nationalities in Lebanon are affected by the country’s multifaceted crisis and collapse of public services. They face heightened risks of abuse, exploitation and violence, and of getting in contact or even in conflict with the law. Specific groups like refugee children are particularly at risk of seeing their rights violated. Through this project, NGOs and UNICEF will jointly enhance the protection of children from violence by providing them with crucial legal and protection services and by improving the child-friendliness of the justice system (nexus).


Public Service Improvement (PSI) in the Kyrgyz Republic

01.08.2024 - 31.07.2028

To improve people's quality of life, municipalities need to deliver efficiently and effectively services such as safe drinking water, waste collection, cultural facilities in a socially inclusive and gender responsive manner. In rural Kyrgyzstan, their capacities still need to be improved in a sustainable way. To achieve this, the project will develop the municipalities' support system which shall then provide adequate counseling and training to those municipalities today and in the long run.


Promoting efficient, affordable and clean cooling for everyone (PEACCE)

01.08.2024 - 31.07.2028

The Promoting Efficient, Affordable and Clean Cooling for Everyone (PEACCE) project contributes to mobilising global support and political will for scaling up sustainable cooling solutions in sub-Saharan Africa by supporting the Sustainable Cooling programme of the Sustainable Energy for All organisation. With its support, Switzerland aims to leverage its experience in passive cooling and nature-based cooling solutions both within sub-Saharan Africa and globally.

Object 1 – 12 of 1057