Financial institutions with a proven social mission need to overcome the following two key constraints for scaling up their outreach to low-income and vulnerable people:
- A sufficient institutional and human capacity to scale up their operations sustainably; e.g. to have capable and socially dedicated managers and staff who:
- Understand well the household economics of low-income households and gender-specific financial needs; and
- Are capable of designing, testing and rolling out appropriate financial services and cost-effective service delivery mechanisms for low-income and vulnerable households. Less mature financial institutions may also require support in strengthening their management, MIS, cost accounting, internal control & audit, treasury, and human resource development.
- Mobilisation of external financing for their business expansion, notably long-term equity and debt from social investors that accept a moderate financial return given the lack of both social investors and effective capital markets in most SDC partner countries.
The SCBF addresses this latter constraint only indirectly by linking the financial institutions with Swiss and other social investors. The SCBF is mandated to facilitate this ‘match-making’ process by bringing the financial institutions on an ‘early radar screen’ of the Swiss social investors by sharing the capacity-building progress reports.