Distinguished Guests, Dear Colleagues, Ladies and Gentlemen,
It’s a pleasure to be here. I’m delighted to see so many of our partners and friends present here today, and I hope that you have found today’s discussions both enriching and inspiring.
In my closing remarks, I won’t even attempt to deliver any radically new insights to a group of experts who have been covering a topic in depth for an entire day.
But what I’d like to do is to offer some thoughts on why I believe initiatives like the Participatory Microfinance Group for Africa (PAMIGA) will play an even more important role in the future and why such public-private collaborations are central to the SDC’s own development mandate.
The central importance of economic and financial inclusion for development
PAMIGA has indeed been ground-breaking in many respects: it’s about economic development, financial inclusion and equity, access to water and access to energy.
But even more so, it responds to the realization that without a greater push for economic and financial inclusion, we will not succeed in improving the lives of those that matter most to our development mandate – the poor. How do we include them, enable them to get access to basic services and clean water, help them acquire the means to work and study, start a new business and improve their well-being?
The SDC currently invests around CHF 60 million per year to improve the financial inclusion of low-income populations. This means giving them access to fair and formal financial products, including savings products as well as micro-insurance, loans and micro-leasing.
With these efforts, over one million disadvantaged people in our partner countries in Asia, Latin America, sub-Saharan Africa, and North Africa have gained access to financial services for the first time, significantly increasing their income and employability:
In Bolivia alone, more than 34,000 people (of whom 40% women) were able to access essential financial products last year.
In Mozambique, thanks to the SDC’s support, a local micro-credit bank provided innovative products to 15,000 people who were previously denied access to traditional financial services.
In the area of micro- agrarian insurance and micro-life insurance, too, remarkable progress was made over recent months to offer such products to the poorest groups. Last year alone, we were able to reach some 330,000 people with these relatively new instruments.
The complementarity of development aid and private investment
Of course, financial inclusion of the poor is just one of many challenges when it comes to achieving international development goals.
When world leaders adopted the 2030 Agenda for Sustainable Development at the UN summit in New York last year, they recognized that the sheer volume of investment required to implement this agenda was much too large for any single source of funding to cover.
Consider this: according to the United Nations Conference for Trade and Development (UNCTAD), USD 5 to 7 trillion (that’s 12 zeros!) is needed every year to fully implement the Sustainable Development Goals (SDGs). In developing countries alone, USD 3.5 to 4.5 trillion is required. This represents about 30 times the amount of official development assistance (ODA) worldwide!
The good news is: we do have enough money available. But it needs to be invested differently. We need new incentives, so that money and savings from states, pension schemes, companies and private individuals are increasingly invested in ways that are not just productive and profitable but also sustainable. At the same time, we have to stop illicit financial flows, which draw badly needed resources away from developing countries.
So what does all this mean for official development aid budgets?
While ODA alone will certainly not suffice to finance the SDGs, it will continue to play an important role in the foreseeable future. Because unlike other sources of investment, financing from development agencies such as the SDC can be channeled strategically towards projects that not only directly benefit the poor and most vulnerable groups in society but also help to leverage co-financing from other sources.
Deploying public-private development partnerships more systematically
As many of you will already know, we are currently in the process of delivering the new Dispatch to Parliament on Switzerland’s International Cooperation Strategy for the period 2017 to 2020. It largely reflects our approach to the implementation of the 2030 Agenda for Sustainable Development.
Consultations are still underway, but I think it’s safe to say that, broadly speaking, there is support for the SDC’s intention to strengthen its collaboration with the private sector and to more systematically develop its portfolio of public-private development partnerships (PPDPs).
To do so, we’ve kicked off an internal process of realignment at an organizational level, based on our prior experience and an analysis of future opportunities that will allow us to implement more PPDPs in the coming years.
Let me just mention one exciting example of a PPDP which, like PAMIGA, has shown promising signs of success: the Swiss Capacity Building Facility (SCBF).
The SCBF was set up in 2011 between the SDC and a number of companies from Switzerland’s financial industry. It aims to help financial institutions in our partner countries – local insurers, micro-finance institutions, commercial and postal banks, saving and loan cooperatives – offer products and services to low-income groups, including individuals and households, smallholder farmers and small businesses. It places a particular focus on opportunities for women.
Thanks to the SCBF partnership, close to 1.5 million low-income households are expected to have access to adequate financial services by 2018.
Ladies and Gentlemen,
Partnerships between the public and private sectors bring together essential skills and resources – both human and financial – that are complementary and quite often mutually reinforcing. All of them are needed if we want to succeed in reducing poverty and securing development gains in the long run.
It’s clear: we need to find more and better ways of working together to implement the SDGs, so that we can fulfill the promises made in the 2030 Agenda for the Sustainable Development. This will no doubt require from us all a great deal of good will, shared commitment and, at times, joint risk-taking.
Initiatives like PAMIGA and the SBCF show that we’ve already come a long way towards demonstrating how public and private sector actors can achieve impressive results together. But I also believe that there is a lot more potential for collaboration. And I hope that the exchanges you’ve had today have provided some inspiration and ideas for more of it.
On behalf of SDC, I would like to thank all participants, investors and representatives of PAMIGA for being here to participate in this credit forum. And I encourage all of us to continually look for new opportunities that allow us to work together in partnership to achieve even better and longer-lasting development impacts.
Thank you very much.