Rural finance – The key to development in rural regions

The overwhelming majority of the world's poor live in rural regions.  The economic development of such regions is one of the keys to reducing global poverty.  One of the main criteria in this regard are financial services that take account of the needs of farmers and small agricultural businesses as well as non-agricultural occupations such as traders and manufacturers.

The SDC's focus

The SDC promotes innovative approaches and projects for the development of an inclusive rural finance system that supports both agricultural and non-agricultural activities with appropriate financial services, such as savings, credit, payment transactions and insurance.  The SDC capitalises on synergies with other rural development measures which promote quality, productivity and the marketing of agricultural products, for example.  The main focus is on:

  • Support for economically viable, client-centric financial institutions and structures in rural regions, including savings and credit unions or co-operatives, alliances between informal and formal financial institutions, full-service banks with a presence in rural areas, or new types of rural development banks, etc.
  • Promotion of education and training in finance at all levels – customers, employers, management as well as control and supervisory bodies of financial institutions
  • Promotion of innovation, such as new financial products and services, for farmers as well as agricultural and non-agricultural businesses
  • Promotion of favourable political and legal frameworks

Background

Despite the important economic role played by rural regions, they generally suffer from a distinct lack of financial services.  Financial services for farmers, agricultural and non-agricultural businesses are either non-existent or inadequate and very expensive.

Rural and urban regions need different financial services. In rural areas, credit requirements are of a medium to long-term nature; loans carry more risk for financial institutions and frequently entail significantly higher transaction costs. 

Current challenges

The development of rural financial systems entails a range of specific challenges.  These include low population density and low economic activity, high transaction costs due to deficient infrastructures (roads, telecommunications) or insufficient population and land tenure records, a lack of qualified personnel in financial institutions as a result of the low education level, specific agricultural risks, such as fluctuating precipitation, pest outbreaks and disease, and price fluctuations.

Current projects

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

01.07.2016 - 30.06.2023

L’élevage et les marchés des produits animaux contribuent à l’intégration régionale et à la sécurité alimentaire en Afrique de l’Ouest. La Suisse soutient la Communauté Economique des Etats de l’Afrique de l’Ouest (CEDEAO) et le secteur privé de la région afin de fluidifier les échanges des produits animaux entre les 15 Etats plus le Tchad. La finalité est d’accroitre le revenu des éleveurs, développer des emplois surtout pour les femmes et les jeunes et favoriser une transhumance apaisée dans la région.


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



Decentralized Rural Infrastructure and Livelihood Project (DRILP) – Phase III

01.01.2016 - 31.07.2021

DRILP Phase 3 will support the Government of Nepal to accelerate recovery and reconstruction following the devastating earthquake of 25 April 2015 and the major aftershock of 12 May 2015. The project will provide the Technical Assistance (TA) to implement the Asian Development Bank (ADB) financed Earthquake Emergency Assistance Project in rebuilding 450 kms of damaged roads in 12 districts[1] of Nepal and rehabilitate 200 kms of trails in two[2] districts.

[1] The 12 earthquake affected project districts are Solukhumbu, Okhaldhunga, Ramechhap, Dolakha, Kavre, Sindhuli, Kathmandu, Lalitpur, Bhaktapur, Lamjung, Gorkha and Chitwan

[2] Dolakha and Gorkha


Access Agriculture: Videos for Farmers

01.12.2015 - 30.06.2021

Access Agriculture is a global web platform aiming at providing easy access to agricultural learning and training videos of quality. Over 250 quality training videos will be available and translated into more than 60 local languages. These videos are targeted at small-scale farmers in developing countries as well as research staff, service providers, private and public extension services, farmer organisations and rural tv stations. They enable learning from farmer to farmer to support sustainable agriculture.


Seeds and Access to Markets Project (SAMP) Phase 3

01.10.2015 - 31.12.2021

The project contributes to increased food and nutrition security of smallholder farmers by improving availability of and access to adequate quantities of quality seeds and planting material of suitable and diversified crop varieties. This enables smallholder farmers to produce enough food to sustain themselves, their communities, and earn higher incomes. The project strengthens national and local farmer-led institutions, supports community seed and commodity production and strengthens seed and commodity distribution networks.


Contribution to the Pan African Bean Research Alliance PABRA

01.01.2015 - 31.12.2021

The greatest global challenge today is how to ensure food and nutrition security of a rapidly growing human population, considering climate change and without adversely affecting the natural base upon which the production is dependent. Beans, as the most important consumed grain legume, are a very good source of vitamins, minerals, and plant derived micronutrients. Significant yield increase of more than 60% are possible, following access to and use of improved varieties coupled with integrated crop management practices.


Programme d’Appui au Secteur de l’Elevage au Mali – PASEM

01.12.2014 - 31.12.2021

Malgré son importance dans l’économie, l’environnement et les sociétés (agro)pastorales, l’élevage rencontre plusieurs contraintes dont la faible productivité, l’insécurité foncière, la faible organisation des acteurs et une forme de marginalisation sociale des éleveurs. La DDC souhaite valoriser les immenses potentialités de l’élevage en renforçant l’approche chaine de valeurs orientée vers le développement des marchés et des acteurs du secteur privé, favorisant la prise en compte des pauvres, des femmes et des jeunes.


Programme d’appui à la production agricole en Haiti

01.07.2014 - 31.12.2021

Le développement et le renforcement des services financiers et de conseils agricoles ainsi qu’un ciblage des groupes vulnérables en milieu rural contribueront – à travers de plus grands investissements dans l’agriculture - à une productivité et à une qualité accrue dans les filières concernées, à des revenus plus importants, à une sécurité alimentaire améliorée, à une vulnérabilité réduite et à une meilleure protection sociale des petit-e-s producteurs-trices et des personnes les plus défavorisées.


Programme d’Appui aux Filières Agropastorales de Sikasso – PAFA

01.06.2013 - 31.07.2021

La DDC soutient le Conseil Régional de Sikasso et les partenaires privés locaux dans l’amélioration des conditions cadres pour le développement des filières pomme de terre et lait. Les appuis apportés contribueront à une meilleure organisation des différents segments de ces filières, de la production au marché et à la valorisation locale des produits au profit des petits producteurs et transformateurs. A terme, plus de 360'000 personnes assureront leur sécurité alimentaire et réduiront leur pauvreté.

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