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 61 – 72 of 1075

Gender-based Violence Prevention and Response Project (GBV Project)

01.01.2024 - 31.12.2027

Gender-based violence is prevalent in Nepal because of patriarchal values, lack of rights awareness or support services and poor implementation of laws. In the first phase, the project will directly reach 50,000 households in three districts with GBV prevention activities involving women, girls, men and boys and will provide improved medical, psychosocial and legal services for a minimum of 1’000 GBV survivors. Subsequently, the coverage will be increased.


Swiss Malaria Group

01.01.2024 - 31.12.2025

Founded in 2007 as an informal network, the Swiss Malaria Group (SMG) has undergone organisational development leading to a formalized multi-stakeholder group with a strategic focus on raising awareness about malaria and the comparative advantage of Switzerland to defeat the disease. Organised as an association, with an Executive Secretariat hosted by Medicus Mundi Switzerland, the 15 organisations help accelerating malaria elimination, through innovative control measures, knowledge and financial flows.


Intégration de la santé mentale dans les soins de santé primaire au Burundi

01.01.2024 - 31.12.2031

L’intégration de la santé mentale dans les services de santé primaire du Burundi vise à renforcer le système de prise en charge des personnes atteintes de maladies mentales post traumatiques. La Suisse est un partenaire important du Burundi qui a un intérêt à contribuer à mettre fin au cycle de violences qui trouvent leur origine en partie dans des traumatismes vécus mais non traités. Le programme appuie les institutions nationales concernées, le système de formation spécialisée et vise l’amélioration du cadre législatif en santé mentale.


Participation des femmes dans le processus de paix, de sécurité et de relèvement au Mali

31.12.2023 - 31.03.2031

La Suisse s’engage au Mali pour une participation plus significative des femmes dans le processus de paix. Par l’intermédiaire de ONU-Femmes, les soutiens directs à des initiatives de la société civile malienne seront complétés par la réalisation du Plan d’Action National pour la mise en œuvre de la Résolution 1325 de l’ONU, concernant la participation de femmes dans les processus de paix et les garanties de sécurité. Le programme contribue ainsi à la stabilisation de la sous-région


Strengthening regional cooperation on migration in the Western Balkans

01.11.2023 - 31.12.2027

In light of diversifying migration patterns and challenges with increasing regional dimensions, the migration policy priorities of Western Balkan governments are changing and the relevance of regional dialogue, coordination and cooperation is growing. This proposal seeks to promote coherent and effective regional governance of migration in all its multifaceted dimensions contributing to greater social cohesion and regional integration in the Western Balkans.


Financement des fonds agricoles nationaux du Bénin (FinAgri)

01.12.2022 - 30.11.2030

Au Bénin, il n’existe pas de dispositif national pour le financement du secteur agricole (agriculteurs, éleveurs, artisans et entreprises agricoles). Par la présente initiative, la DDC veut soutenir l’Etat béninois et le secteur privé dans la mise en place des dispositifs communs et pérennes de financement du secteur. Le but est de renforcer la productivité, la compétitivité des productions agricoles et la résilience des systèmes de productions aux effets des variations climatiques.


Ashshash: for men and women who have escaped trafficking

01.10.2022 - 28.02.2029

20,000 people (of whom 70% women) who have experienced trafficking will be economically and socially rehabilitated. Public and private institutions will provide employment or in-kind support for entrepreneurship to men and women who have escaped trafficking. The Government will better address the prevention of trafficking, protection of victims, prosecution of traffickers in the revision and enacting of policies, and create partnerships, for bringing about systemic changes.


Soutien au Dispositif National de Sécurité Alimentaire -PRESA-

01.07.2022 - 31.12.2025

Malgré l’excédent céréalier enregistré durant ces deux dernières décennies, l’insécurité alimentaire touche près du ¼ de la population du Mali. La DDC veut renforcer les capacités institutionnelles et organisationnelles du dispositif national de sécurité alimentaire en vue d’améliorer la prévention et la gestion des crises conjoncturelles et accroître la résilience des populations vulnérables à l’insécurité alimentaire et nutritionnelle.


Promoting physical activity and healthy diet through regulatory measures (ProPDR)

01.01.2022 - 31.12.2023

Non-communicable diseases constitute one of the major global health challenges today. Unhealthy diet and physical inactivity are the main causes of obesity and related morbidities. The adaptation of national regulatory and legislative frameworks is critical for the prevention and control of Non-communicable diseases. This initiative strives to strengthen capacity and expertise of low- and middle income countries to implement legal and regulatory measures.


Programme d’appui à la commercialisation du bétail en Afrique de l’Ouest

01.01.2022 - 31.12.2024

Dans la région ouest africaine, le secteur de l’élevage est une grande opportunité d’intégration économique et de création de richesses pour les populations et les pays. En complément au soutien au secteur dans les pays prioritaires, ce programme vise le renforcement de la chaine de valeur régionale des produits animaux au profit des éleveurs. L’accent est mis sur le renforcement du secteur privé et l’amélioration des politiques et pratiques régionales d’échanges en  produits animaux.


Sustainable Natural Resources Management (NRM) for Enhanced Pastoralist Food Security in the Borana Zone, Ethiopia.

01.01.2022 - 31.12.2027

Natural resources, particularly water and pasture, are among the key determinants of pastoralist livelihoods’ sustainability. The proposed Project contributes to the outcomes of the SDC’s Food Security Domain as stipulated in the Swiss Cooperation Strategy Horn of Africa. It aims at improving pastoralist food security and adaptive capacities in the lowlands of Borana Zone, Southern Ethiopia, through enhancing the sustainable management of natural resources.


Object 61 – 72 of 1075