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SECO provides long-term corporate financing and helps to expand the range of financial products available to SME. At the same time, it contributes to improving the efficiency of the financial sector in the partner countries.
Access to long-term investment capital is critical for the survival of many SME in developing and emerging countries; it is often lacking, however, on account of market deficiencies. SECO thus promotes local financial intermediation in the partner countries. This support is additional, i.e. it aims to leverage private investment instead of crowding it out. At the same time, SECO uses a range of measures to help improve the efficiency of the financial sector in these countries.
Long-term corporate financing is primarily provided by the Swiss Investment Fund for Emerging Markets (SIFEM). SIFEM takes a financial stake in local or regional venture capital funds which provide equity to SME. It also grants loans to local financial intermediaries (banks, microcredit institutions), enabling these in turn to extend investment credits to their corporate customers.
The SECO Start-up Fund (SSF) is available for Swiss SME for the co-financing of investment projects in developing and transition countries. Loans of up to half a million Swiss francs can be granted for economically viable investment projects that meet recognised environmental and social standards.
The long-term financing by SIFEM and the SECO Start-up Fund focus on growth-oriented companies and create a significant number of jobs in the partner countries. Both funds are regularly evaluated, both quantitatively and qualitatively.
SECO is also an active partner in the Private Infrastructure Development Group (PIDG). This consortium of development agencies uses a variety of instruments to promote the private or semi-private financing of infrastructure projects in the partner countries.
SECO offers technical assistance and start-up funding to promote the financial inclusion of businesses and households and to expand the product offering of financial intermediaries. Particular importance is placed on developing innovative financial products, for example by way of enhancing the technologies and framework conditions necessary to increase the spreading of mobile banking applications. Another example is insurance products to cover the risk of climate and weather-related natural disasters.
Recent years have seen a growing number of firms and individuals in the partner countries take on excessive foreign debts, thereby exposing themselves to a huge foreign exchange risk. SECO thus helps to promote local currency financing. Other measures seek to build up the local financial infrastructures through legislation on new financial products and the establishment of collateral registries and credit bureaus. Other important aspects are the financial literacy training of market players, strengthening the risk management of financial services providers and improving the supervision of previously under-regulated domains such as microfinance.
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