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

Object 25 – 36 of 1073

Safeguarding children’s rights in East Jerusalem

Safeguarding children’s rights in East Jerusalem, occupied Palestinian territory

01.12.2016 - 31.12.2020

By supporting a comprehensive child protection programme in occupied East Jerusalem, Switzerland aims to ensure that vulnerable children at risk of being in conflict with the law or directly affected by the conflict, together with their families, have access to appropriate preventive and protection programmes. The intervention, implemented by UNICEF and its partners, is in line with Switzerland's engagement for the respect of human rights and international humanitarian law in the occupied Palestinian territory.

Country/region Topic Period Budget
Palestinian Authority
Governance
Conflict & fragility
Human rights
Legal and judicial development
Conflict prevention
Human rights (incl. Women's rights)

01.12.2016 - 31.12.2020


CHF 2'250'000



Lebanon: education and care in a neighbourhood shared by Lebanese, Syrians and Palestinians

Inside a classroom where a woman teacher is sitting in front of a group of children showing them a book.

01.08.2016 - 31.07.2020

The inhabitants of Hay el Gharbé in southern Beirut live in a very precarious situation. Since 2012, a number of Syrian refugees have joined their neighbourhood. The SDC supports the Lebanese NGO Tahaddi, which has made a real difference in people’s lives here – such as with its education centre, helping a large number of children to (re)discover schooling and escape their daily hardships. 

Country/region Topic Period Budget
Lebanon
Education
Health
Primary education
Primary health care
Medical services

01.08.2016 - 31.07.2020


CHF 1'270'000



Supporting livestock traceability in the South Caucasus

The image shows a close-up of a calf with an identification tag in its right ear.

15.06.2016 - 31.12.2021

Identifying where animals have come from and recording information about their health is essential in modern agriculture to prevent the spread of diseases and stop products from diseased animals reaching the market. A system to ensure traceability will help to improve the incomes of farmers in the South Caucasus by increasing both herd productivity and the producers’ access to markets.

Country/region Topic Period Budget
South Caucasus
Agriculture & food security
Agriculture value-chain development (til 2016)

15.06.2016 - 31.12.2021


CHF 5'935'000



Combating corruption in Kosovo

Four young developers sitting at a table discussing IT solutions designed to help the municipality create more transparency.

01.05.2016 - 30.06.2020

Corruption is rampant among Kosovo’s public institutions and undermines citizens’ trust in the system. The SDC is supporting a project designed to address this problem by promoting transparency in institutions and encouraging citizens to report abuses.

Country/region Topic Period Budget
Kosovo
Governance

Anti-corruption organisations

01.05.2016 - 30.06.2020


CHF 2'855'500



Confronting and combating gender-based violence in Mongolia

Two female Mongolian social workers.

01.05.2016 - 31.07.2020

Gender-based violence has been on the rise in Mongolia since the turn of the millennium. Yet because of a serious lack of data, the extent of the phenomenon is difficult to assess and a culture of impunity continues to hold sway.  The SDC plans to conduct a national survey to address this problem.  At the same time, it intends to strengthen institutions, put in place appropriate services and raise public awareness.

Country/region Topic Period Budget
Mongolia
Governance
Gender
Legal and judicial development
Sexual & gender-based violence

01.05.2016 - 31.07.2020


CHF 4'090'000



Prospects for young, unemployed adults in Bosnia and Herzegovina

01.04.2016 - 31.03.2022

The aim of the Youth Employment Project (YEP) is to help public employment bodies in Bosnia and Herzegovina to improve their offer and to introduce youth-friendly services, such as individual and group careers advice for unemployed young adults between 18 and 30 years. Together with local partners, YEP also promotes new job opportunities linked to social entrepreneurship models.

Country/region Topic Period Budget
Bosnia and Herzegovina
Employment & economic development
Vocational training
Employment creation
Business support & economic inclusion
Vocational training

01.04.2016 - 31.03.2022


CHF 6'789'086



Migration for social well-being and economic development in Sri Lanka

Family members excitedly examine their travel documents

01.03.2016 - 31.12.2020

Every year, large numbers of Sri Lankans leave their country to work abroad for a few years, usually in the Gulf States. They thereby further Sri Lanka's economic development but at the same time risk having their basic human rights, and their labour rights in particular, violated. That is why the Swiss Agency for Development and Cooperation (SDC) is working for the establishment of a framework that ensures decent working conditions for migrant workers in the region.

Country/region Topic Period Budget
Sri Lanka
Employment & economic development
Migration
Labour migration
Migration generally (development aspects and partnerships)

01.03.2016 - 31.12.2020


CHF 6'850'000



Nepal: An array of measures to tackle gender-based violence

Group photo of the participants from above

01.02.2016 - 30.06.2020

Gender-based violence is a widespread problem in Nepal, and an obstacle to sustainable development. The SDC and the United Nations Population Fund (UNFPA) launched a 3-year prevention and response project at the beginning of 2016. Women and girls are learning about their rights and being encouraged to report assaults. Men and boys are being encouraged to change their behaviour towards women. And duty bearers are learning to respond more rapidly and effectively. The project is already delivering first encouraging results.

Country/region Topic Period Budget
Nepal
Gender
Human rights

Sexual & gender-based violence
Human rights (incl. Women's rights)

01.02.2016 - 30.06.2020


CHF 3'743'000



Vocational skills development in Tunisia – destination employment

In Tunisia, an SDC programme enables young job seekers to acquire the technical and social skills required in the workplace

01.01.2016 - 31.03.2021


An SDC programme boosts the employability of young Tunisians entering the job market. It provides them with training in vocational skills to equip them with the practical experience and know-how required in the workplace.

Country/region Topic Period Budget
Tunisia
Vocational training
Employment & economic development
Vocational training
Employment creation

01.01.2016 - 31.03.2021


CHF 9'603'475



Reforming civil society organisations in Moldova

Women and men assembled in a room

01.12.2015 - 30.06.2021

The Engaging Citizens and Empowering Communities project aims to strengthen civil society organisations by enabling them to play a crucial role in promoting and safeguarding the rights and interests of vulnerable and marginalised people in Moldova.

Country/region Topic Period Budget
Moldova
Governance
Human rights
Rule of Law - Democracy - Human rights
Democratic participation and civil society
Human rights (incl. Women's rights)

01.12.2015 - 30.06.2021


CHF 3'150'000



Appui aux économies locales des collectivités de Youwarou et de Niafunké. Programme de Soutien aux Economies Locales du Delta intérieur du Niger

01.07.2015 - 31.12.2020

Dans les régions du delta intérieur du Niger, au centre et au Nord du Mali, les populations rurales sont confrontées à des crises structurelles multiformes dont l’insécurité alimentaire. La DDC appuie les autorités locales avec des projets économiques dans les filières agricoles porteuses pour assurer la sécurité alimentaire et réduire la pauvreté d’au moins 150'000 personnes. En plus, elle accompagne les municipalités de cette zone dans la maitrise d’ouvrage du développement territorial et la gestion pacifique des ressources naturelles.

Country/region Topic Period Budget
Mali
Agriculture & food security
Governance
Climate change and environment
Rule of Law - Democracy - Human rights
Agriculture value-chain development (til 2016)
Decentralisation
Environmental policy

01.07.2015 - 31.12.2020


CHF 9'445'000



Sustainable water and pasture management to alleviate the plight of Ethiopian pastoralists

A group of Ethiopian men and women beside a half dried-up pool of water, using picks and shovels to dig new basins.

01.06.2015 - 31.12.2021

Drought, fodder scarcity and conflicts over natural resources make life difficult for pastoralists in southern Ethiopia. The SDC has taken various measures to improve their food security and their resilience to crisis situations, ranging from the rehabilitation of pastureland and water points to the introduction of land use plans and the diversification of income sources for women.

Country/region Topic Period Budget
Ethiopia
Agriculture & food security
Conflict & fragility
Climate change and environment
Water

Agricultural development
Agricultural land resources
Conflict prevention
Environmental policy
Disaster risk reduction DRR
Water resources conservation

01.06.2015 - 31.12.2021


CHF 8'653'920


Object 25 – 36 of 1073