The SDC has been active in financial sector development (FSD) since the 1970s, promoting FSD as an important strategy towards poverty reduction. It focuses its efforts on promoting access to and usage of a range of client-centric, responsible and sustainable financial services and products for low-income groups.
The SDC considers the promotion of savings to be a key first step in the financial integration of people with low incomes. It also fosters access and usage of credits by supporting microfinance institutions with the aim to offer diversified financial services to households, micro and small entrepreneurs, men and women farmers in a manner tailored to their needs. Furthermore, it is increasingly focusing on developing markets for agricultural insurance and disaster insurance schemes together with global reinsurance companies in order to break through this barrier in financial integration.
Financial inclusion is positioned prominently as an enabler of other developmental goals in the 2030 Agenda and the Sustainable Development Goals, where it is featured as a target in eight of the seventeen goals. Correspondingly, the SDC recognizes the important role of financial inclusion as an enabler of other development goals. As a consequence, many SDC programs have financial inclusion components to facilitate the achievement of their objectives.
There are systemic interlinkages and synergies between FSD and the other two topics, Private Sector Development (PSD) and Vocational Skills Development (VSD). For micro, small and medium enterprises to thrive, access to financial services is key. Likewise, young people need more financial education, to then be able to save and apply for credits if needed (e.g. to (co-)finance their vocational skills training or start their own businesses).
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