Microfinance - Small amounts, huge impact

By promoting microfinance, the SDC aims to offer cost-effective, comprehensive financial services geared specifically to the needs of poor sections of the population and microenterprises.

The SDC's focus

The SDC is committed to creating a financial sector that also takes account of the needs of poor households, women, smallholder farmers and microenterprises.  This is also known as the microfinance sector because it targets low-income sections of the population and microenterprises in particular. The SDC regards the development of financial services as an entrepreneurial challenge and aims to create cost-effective, sustainable services geared to clients' needs and able to respond flexibly to changing market conditions.

The key elements are:

  • The SDC supports a wide range of financial institutions that offer services for poor client groups.  Depending on the context, these may be formal financial institutions, such as banks that offer microfinance products in direct or indirect collaboration with self-help organisations, specialised institutions, such as co-operative societies, non-governmental organisations, village savings funds, post office banks or informal financial institutions, such as savings and loan groups or other civil organisations, etc.
  • The SDC promotes financial education for its target groups. This helps people learn more about financial products such as savings accounts and micro-insurance as well as basic skills in handling modest savings.

Background

When given the opportunity, poor sections of the population will eagerly save even the tiniest amounts. In poorer countries, the savings volume is often many times higher than the lending volume.  Moreover, loans are usually repaid reliably.  So it is all the more surprising that the overwhelming majority of the population in virtually all developing countries still have no access to adequate financial services.

By developing microfinance structures (specialised microfinance institutions, alliances between banks and non-governmental or self-help organisations, commercial banks with specific service structures for poor clients), even poor sections of the population can be integrated in the economic cycle.  As a fixed component of the financial sector, microfinance is aimed at economic actors who have no regular access to appropriate financial services via formal financial institutions.  The aim is to offer a broad, differentiated range of products and services for small and micro amounts of cash, including loans, savings services, insurances and cashless transactions.

Secure savings options are particularly important for households with small, irregular incomes and for women, in order to hedge against emergencies or set aside money for their children's education or other long-term investments. In addition to savings, access to credit facilitates their participation in economic life.  It enables them to capitalise on business opportunities and expand existing commercial activities.  Access to financial services can pave the way to a self-determined life of economic self-sufficiency.  This applies particularly to poor women who account for more than half of all microfinance clients around the world.

Current challenges

Facilitating access to secure financial services for poor sections of the population remains one of the key challenges for microfinance.  In addition to expanding financial and management know-how for clients and providers, the focus is on building and expanding sales channels and creating favourable framework conditions.  There is also a need to enhance efficiency and reduce costs in order to offer services cost-effectively and, thereby, sustainably.

Another challenge is to develop new products that meet the variety of needs of poor sections of the population.  A varied, secure range of savings products, long-term credit, insurance products and risk capital are just a few of the key ideas in this area.

Documents

Current projects

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Building Damage Assessment in Albania

01.04.2024 - 31.12.2027

The devastating earthquake in 2019 revealed that Albania has a weak policy and institutional framework and low public awareness on building damage assessment. The Swiss project will support Albania in strengthening its disaster risk management institutions at national and municipal level to provide sustainable and effective building damage assessment services, leading to safer living conditions and a more disaster resilient business environment.


8th Global Platform for Disaster Risk Reduction, Geneva, June 2025

01.03.2024 - 31.12.2025

The Global Platform for Disaster Risk Reduction is the most important international conference to discuss progress in the implementation of the Sendai Framework for DRR. The eighth session of the Global Platform will be hosted by Switzerland in Geneva in June 2025. It will review advances in the realisation of the calls to action made in 2023 by the United Nations General Assembly on the midterm review of the Sendai Framework and will be key for the identification and support of measures to accelerate DRR implementation and improve coherence with the Agenda 2030 and the Paris Agreement.


Appui aux Programmes PASEC et PACTE de la CONFEMEN (Conférence des Ministres de l’Education des Etats et Gouvernements de la Francophonie)

01.03.2024 - 28.02.2028

En soutenant le Programme d’Analyse des Systèmes Educatifs (PASEC) et le Programme d’Appui à la Transformation de l’Education (PACTE) de la Conférence des Ministres de l’Education de la Francophonie (CONFEMEN), la Suisse contribue au renforcement de l’accès et de la qualité de l’éducation dans ses pays prioritaires en Afrique de l’Ouest. Des analyses approfondies des systèmes éducatifs sont réalisées, et les résultats permettent d’orienter les politiques éducatives pour une efficacité accrue.


Addressing Climate and El Niño-related Risks in Southeast Asia

01.02.2024 - 31.07.2025

Through an innovative partnership with the Asian Disaster Preparedness Centre (ADPC) and Geoneon, the SDC will support the creation of high-quality geospatial data products to support riskinformed and climate-smart decision-making in development cooperation and DRM in priority subnational areas in Lao PDR and Indonesia, contributing to and complementing efforts under the SERVIR Southeast Asia project implemented by ADPC and supported by USAID and NASA.


UNHCR Digital Hub of Treasury Solutions (DHoTS)

01.02.2024 - 31.01.2026

Switzerland supports UNHCR’s Digital Hub of Treasury Solutions to create a UN Center of Excellence (CoE) in Geneva. It will facilitate the UN System’s and its partners’ access to global financial ecosystems and markets. It will trigger collaboration opportunities for advancing new cutting-edge capabilities and technologies, support preparedness and readiness in humanitarian emergencies for the delivery of aid assistance and financial inclusion and reduce financial transaction costs.


Climate & Socially Resilient Livelihoods’ Support (CSRLS)

01.02.2024 - 30.04.2028

The climatic challenges exacerbate Afghanistan's already fragile socio-economic condition. The project by the Afghan NGO, The Liaison Office, aims to sustainably improve lives and livelihoods of the poorest households in selected provinces by strengthening the natural resource base, climate change resilient and diversified livelihoods, relationships within and between communities, as well as joint climate action.


Supporting Anticorruption and Asset Recovery through the United Nations Office on Drugs and Crime and the UNCAC Coalition

01.01.2024 - 31.12.2024

Switzerland has a fundamental interest in preventing corruption so that resources in partner countries flow in public services and sustainable development, and stolen assets are not deposited in Swiss financial institutions. Supporting the effective implementation of the United Nations Convention Against Corruption (UNCAC) including a multilateral dialogue platform on asset return will ultimately lead to increased resources for the implementation of the Sustainable Development Goals.


UNICEF, EMOPS Geneva, Core Contribution 2024-2025

01.01.2024 - 31.12.2025

The Office of Emergency Programmes (EMOPS) ensures that the United Nations Children’s Fund’s (UNICEF) role in complex emergencies is clearly defined, the organization properly equipped and prepared to deliver its mandate to support the needs of children. SDC’s support to EMOPS in Geneva enables UNICEF to lead inter-agency humanitarian coordination, response and standard setting in Water and Sanitation (WASH), Education, Nutrition and Child Protection.


Safeguard Young People (SYP) - Tanzania

Safeguard Young People Programme

01.01.2024 - 31.12.2026

With 62% of its population below 25 years, the Safeguard Young People (SYP) programme supports Tanzania’s demographic dividend. The project advances young people’s sexual and reproductive health and rights (SRHR) through a gender-responsive and inclusive policy environment, empowered youth who make informed decisions, and responsive health and education systems. SYP builds on 10 years of regional experience and UNFPA’s expertise.


Contribution to Medicus Mundi Switzerland (MMS) Network

01.01.2024 - 31.12.2027

Medicus Mundi Switzerland is a Network of 49 Swiss non-governmental organisations, foundations and scientific institutions involved in health advocacy at global level and health programmes in lowand middle-income countries. Taking a multisectoral approach and fostering open dialogue with relevant actors, decision-makers and the broader public, the Network facilitates the exchange of knowledge and experience and contributes to finding solutions to global health challenges.


CABI PlantwisePlus

01.01.2024 - 31.12.2027

PlantwisePlus is a global programme that is supporting countries and farmers to predict, prevent and prepare themselves for plant health threats in a changing climate. This will allow farmers to reduce their crop losses and produce more and safer food using agroecological and climate-smart practices that safeguard human health and biodiversity. The programme is implemented by CABI, a leading intergovernmental research and development organization in plant health, with research facilities in Switzerland.


SUD, OCHA: Sudan Humanitarian Fund 2024

01.01.2024 - 31.12.2024

The SHF is a country-based pooled fund that contributes to saving lives and protecting people in need by strengthening a coordinated and principled humanitarian response. It enables humanitarian actors to respond early and fast to humanitarian needs set out in the Humanitarian Response Plan (HRP) and to critical emergencies. All interventions are in line with the Minimum Operating Standards approved by the Humanitarian Country Team.

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