13.01.2012 | Swiss Microfinance Investments Report

pdfSwiss Microfinance Investments Report

Switzerland, a Global Market Leader in Microfinance Investments - Symbiotics and the Swiss Agency for Development and Cooperation ("SDC") Co-Fund Study on Swiss Microfinance Investments

"Switzerland is one of the birth places of microfinance investments and can be considered as a global market leader. Today, Swiss practitioners manage or advise USD 2.3 billion in microfinance investments out of USD 8.3 billion worldwide", explains Daniel Schriber, Director of Symbiotics Research & Advisory. 11% of the total assets are founded by public sector investors, while the rest are coming from the private sector, including institutional investors, family offices or retail investors. These investments are made up of mostly fixed income instruments, with around 10% in private equity. Demand for microfinance in emerging markets remains strong with stable but lower returns than in the past. "The aforementioned figures could easily grow twofold over the 5 coming years", highlights Daniel Schriber.

Symbiotics Research & Advisory has conducted a detailed study about Swiss Microfinance Investments showing Switzerland's potential to become a reference market place in this sector. The study was co-funded by Symbiotics Research & Advisory and the Swiss Agency for Development and Cooperation ("SDC"). The idea for this study emerged from the 2011 annual policy dialogue of Swiss microfinance practitioners with the director of SDC, Ambassador Martin Dahinden, to better understand the role the Swiss private sector plays in expanding responsible financial services to poor households and small businesses in developing and emerging countries in the South and East.

Hans Ramm, Policy Advisor at SDC, says: "SDC as a public entity has been a pioneer microfinance investor in the 1990's when the private sector was not yet in a position to invest in our partner countries. We applaud the innovations of the Swiss microfinance investors and advisers over the past decade in mobilizing more and more private capital for microfinance and, increasingly, also for other development purposes in the South and East. SDC is partnering with them in many ways, seeking synergies in competencies and, thereby, enhancing the effectiveness of the Swiss contribution to global financial inclusion and poverty alleviation. We acknowledge the leading role of Swiss private actors, and notice that for the time being setting up social investment funds in Switzerland is cumbersome".

The report concludes that some legislative and taxation adjustments, similar to the much more enabling fund industry regulation in Luxembourg and the Netherlands, would open up the Swiss market and increase its attractiveness to investors worldwide. This could certainly give way to a new growth spurt in not only microfinance investments but also the much broader and socially responsible area of impact investments, investing in projects related to themes such as food security, fair trade, income and employment creation, climate change, and energy efficiency in emerging markets. It could enable microfinance to become an integral part of Switzerland's financial investment landscape and continue to increase its attractiveness to global socially responsible investors. Last but not least, such strengthened market positioning of a Swiss social fund industry would also reinforce Switzerland's already competitive position in global financial inclusion.

 

About Swiss Agency for Development and Cooperation ("SDC")

The SDC is Switzerland's international cooperation agency within the Federal Department of Foreign Affairs. In operating with other federal offices concerned, SDC is responsible for the overall coordination of development activities and cooperation with Southern developing and Eastern transition countries, as well as for the humanitarian aid delivered by the Swiss Confederation. Further information can be found at www.deza.admin.ch.

About Symbiotics

Symbiotics is a leading finance company in investment advisory and information services to investors and practitioners of micro and small enterprise development from structuring to managing funds, to in-house company due diligence and internal rating, to origination, risk monitoring and transaction servicing. More than 25 microfinance institutions and vehicles use their information, advisory and fund management services to finance over 1 billion USD of investments to 170 MFIs and over 400,000 small and medium enterprises in 41 emerging countries or economies across the world.  Today, Symbiotics has a staff of 40 professionals with offices in Geneva, Mexico City, Cape Town and Singapore.

For more information:

Claire Dorey
Communication Officer
+ 41 (0)22 338 15 40
claire.dorey@symbioticsgroup.com
www.symbioticsgroup.com