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 1 – 12 of 1082

Improving farm productivity in Georgia through dual vocational education and training

Three people in a greenhouse.

01.09.2018 - 31.08.2022

Agriculture is Georgia's most important sector. However, farming remains uncompetitive as farmers' skills are out of step with the job market and technological developments. Switzerland is continuing to support vocational education and training to improve productivity, farm income and the employment situation for students of agriculture.

Country/region Topic Period Budget
Georgia
Vocational training
Agriculture & food security
Employment & economic development
Vocational training
Agricultural services & market
Rural development

01.09.2018 - 31.08.2022


CHF 6'352'000



Capacity building for Serbian municipalities

Around 50 parliamentarians in session at the Serbian parliament.

01.01.2018 - 31.12.2021

Switzerland is supporting the Serbian government’s public administration reform, which aims to make it more effective and accessible to both citizens and the private sector. SwissPRO project is being run in 99 municipalities (two-thirds of Serbia) to improve good governance, social inclusion and gender equality.

Country/region Topic Period Budget
Serbia
Governance
Human rights
Gender
Decentralisation
Human rights (incl. Women's rights)
Women’s equality organisations and institutions

01.01.2018 - 31.12.2021


CHF 7'000'000



Decentralization and Municipal Support in Kosovo (DEMOS)

Two young people rollerblading on a cycle path..

01.01.2018 - 31.12.2021

Since the declaration of independence in 2008, Kosovo has been engaged in the reform and decentralisation of its public authorities with the aim of strengthening autonomy and local democracy in its 38 municipalities. The SDC's “Decentralisation and Municipal Support” project (DEMOS) aims to help municipalities enhance democratic governance and municipal management and provide better public services, thereby supporting Kosovo in its transition to a democratic and decentralised state.

Country/region Topic Period Budget
Kosovo
Governance
Decentralisation
Democratic participation and civil society

01.01.2018 - 31.12.2021


CHF 12'800'000



Mozambique: Less illness thanks to better water supplies and sanitation

A villager in Niassa Province in northern Mozambique works a new handpump. She is surrounded by a group of people.

01.01.2018 - 31.12.2021

Many cases of illness in the poor region of northern Mozambique are caused by the poor condition of water supplies and sanitation.  The SDC is assisting the efforts of the local people and responsible authorities to improve the situation. Aim of the project: Better living conditions for half a million people – and less poverty.

Country/region Topic Period Budget
Mozambique
Health
Health systems strengthening

01.01.2018 - 31.12.2021


CHF 7'445'000



Bosnia and Herzegovina: Improving nursing care for better health services

A nurse sitting in a treatment room.

01.12.2017 - 30.11.2021

In Bosnia and Herzegovina nurses make up the largest group of healthcare professionals. However, the potential offered by their proximity to local communities is underexploited. They are often responsible for administrative tasks rather than patient care and, with limited career prospects, many nurses are attracted by better working conditions in Western Europe. This is regrettable because nurses and the care they provide can be a gateway to better health services for people living in rural areas and marginalised communities.

Country/region Topic Period Budget
Bosnia and Herzegovina
Health
Education
Health systems strengthening
Primary health care
Education facilities and training

01.12.2017 - 30.11.2021


CHF 5'125'000



Improved Access to Markets for Female and Male Fresh Fruits and Vegetable (FFV) Small Scale Producers

Improved access to markets for fresh fruits and vegetable (FFV) small scale producers (men and women), occupied Palestinian territory

01.12.2017 - 30.11.2021

With focus on private sector-led agriculture and agribusiness, this program pursues systemic change in the agriculture sector and supports business modalities that favor small scale producers in the occupied Palestinian territory. The overall goal is to contribute to build a resilient economy with equitable agricultural growth, whilst contributing to protect small scale producers’ entitlements to natural resources and access to markets.

Country/region Topic Period Budget
Palestinian Authority
Agriculture & food security
Agricultural development
Agricultural services & market
Agricultural policy

01.12.2017 - 30.11.2021


CHF 3'900'000



Revitalising labour market in Moldova

Two young women checking cables.

01.12.2017 - 31.12.2021

With Moldova facing high unemployment and a slowdown in growth, the SDC is funding a project designed to offer young job seekers alternatives to emigration and to improve the country's economic situation. Switzerland is supporting reforms aimed at training a qualified workforce and improving the investment climate. This will not only promote demand-driven training but also help create new jobs in the private sector.

Country/region Topic Period Budget
Moldova
Vocational training
Vocational training

01.12.2017 - 31.12.2021


CHF 5'350'000



Reducing youth unemployment in Kosovo with the help of the private sector

Two people on an adventure park ropes course.

16.11.2017 - 15.11.2021

The Promoting Private Sector Employment (PPSE) project is strengthening companies in the food and tourism sectors and spurring job creation in Kosovo.

Country/region Topic Period Budget
Kosovo
Employment & economic development
SME development

16.11.2017 - 15.11.2021


CHF 7'320'000



A more inclusive job market for women in the South Caucasus

A women reads information

01.11.2017 - 31.07.2021

In the three countries of the South Caucasus (Armenia, Azerbaijan and Georgia), many women face job market discrimination. In the absence of policy to create equal opportunities and jobs for women in the formal economy, women work unprotected in the informal sector. The Women’s Economic Empowerment in the South Caucasus project seeks to promote women's economic empowerment to facilitate their equal access to employment and entrepreneurial opportunities.

Country/region Topic Period Budget
South Caucasus
Gender
Vocational training
Women’s equality organisations and institutions
Vocational training

01.11.2017 - 31.07.2021


CHF 3'400'000



A toolbox for sustainable sefl-reliance

Workers learn how to build stable houses in cyclone-affected Southwestern Haiti.

06.09.2017 - 30.06.2021

Haiti has been repeatedly devastated by earthquakes and hurricanes in recent years. SDC engineers are now working with those affected to build more stable houses from local materials. Five hundred new homes are to be built by 2021.

Country/region Topic Period Budget
Haiti
Climate change and environment
Vocational training
Governance
Disaster risk reduction DRR
Vocational training
Public sector policy

06.09.2017 - 30.06.2021


CHF 3'423'500



Support to Municipal Development Project (MDP-3)

Support to municipal development project (MDP-3), occupied Palestinian territory

01.09.2017 - 31.12.2021

Since 2009, the Municipal Development Project (MDP) has been the main vehicle for policy reform in the Local Governance sector in the oPt. It has channelled funding to Municipalities to support infrastructure projects and capacity-building activities in a transparent and equitable manner, despite huge challenges linked to 50 years of Israeli Occupation and to 10 years of intra-Palestinian divide. MDP-3 (2017-2021) is supported by 7 donors and the Palestinian Authority: SDC’s contribution is in line with Swiss Cooperation Strategy for the oPt (2015-2018).

Country/region Topic Period Budget
Palestinian Authority
Governance
Decentralisation
Democratic participation and civil society

01.09.2017 - 31.12.2021


CHF 5'300'000



Water and Sanitation for Syrian Refugees and Their Lebanese Hosts

a 1000 litre water tank

15.07.2017 - 15.06.2020

The crisis in Syria has a significant impact in Lebanon. The country is home to over one million Syrian refugees. Basic needs are unmet due to this unprecedented population growth and lack of public facilities. The SDC supports a project of the Lebanese Red Cross on water and sanitation for Syrian refugees and host communities in the Akkar Governorate bordering Syria.

Country/region Topic Period Budget
Lebanon
WATER SUPPLY & SANITATION
WATER SUPPLY & SANITATION
DISASTER PREVENTION AND PREPAREDNESS
Disaster prevention and preparedness

15.07.2017 - 15.06.2020


CHF 1'100'000


Object 1 – 12 of 1082