The Swiss Capacity Building Facility for Income and Employment Generation (SBCF) was founded as a public-private development partnership (PPDP) with the objective to promote income and employment generation in partner countries of the Swiss Agency for Development and Cooperation (SDC) by scaling up financial institutions.
Around 2,7 billion people1 still do not have access to formal financial services. ‘Access to Finance’ constitutes one of the key bottlenecks for poor people (notably women), farmers, microenterprises and small- and medium enterprises to expand their engagements in the ‘Base of the Pyramid’ (BoP) markets as producers, labourers, and consumers. BoP markets play a crucial role for the livelihood of poor people to realise their economic potential. Thus, BoP market expansion will generate income and employment by:
- Increasing market access for small producers;
- Increasing employment opportunities for under- and unemployed poor; and
- Offering better quality at lower prices for poor consumers due to increased competition.
The PPDP approach combines the complementary expertise and resources of Swiss competence centres in microfinance and microinsurance, Swiss social investors, and SDC so as to optimise the Swiss contribution to ‘Financial Inclusion’ as the overall Financial Sector Development (FSD) goal of SDC, the international donor community, the G20, and the Swiss and international social investors.
The SCBF offers tailor-made capacity-building to financial institutions in the banking and insurance sectors with a proven social mission to expand significantly their outreach to poor households (notably women), farmers, micro enterprises and small and medium enterprises (SMEs). This will help their clients through a range of appropriate financial services (savings, insurance, credit, transfers) to:
- Sustain and expand income-generating activities and build assets.
- Smoothen household consumption and reduce risks and vulnerabilities – mainly through insurance and savings services.
- Improve the family welfare in terms of better nutrition, health and education, particularly if financial services meet the specific financial needs of poor women.
- Finance SME business growth as key engine for income and employment generation.
The financial institutions are already leaders – or the potential next leaders – in their given markets and assume full ownership in managing the selective strategic TA from the SCBF which serves as the missing link for up-scaling responsibly their financial services to poor people and small enterprises. Therefore, SCBF projects constitute high-quality TA inputs from Swiss and Southern competence centres managed by the financial institutions and not ‘usual’ donor-funded projects managed by the competence centres.
The SCBF will initially leverage the skills and resources of Swiss capacity building partners and social investors as well as their Southern partners. This is primarily a catalytic function and will not exclude the use of other international capacity building specialists and social investors to accomplish the four outcomes above.
1 CGAP/World Bank: “Financial Access 2010. The State of Financial Inclusion through the Crises”, Sept. 2010.