Focus Themes Financial Inclusion

Financial Inclusion

At Credit Suisse, we provide leadership and develop innovative solutions to link the top with the base of the income pyramid and promote financial inclusion.

What is Financial Inclusion?

Financial Inclusion is the providing of small or very small loans, savings accounts and other financial services in emerging and developed economies to excluded parties, like microenterprises and individuals. It is an effective way of helping people to help themselves and makes an important contribution to fighting poverty through financial inclusion. Financial Inclusion can be reached through microfinance organizations as well as FinTechs, mobile operators and other actors.

Financial Inclusion started with Microfinance. Microfinance started as an amazingly simple concept: to provide working capital loans as small as USD 100 or less to the poor – who have little or no collateral – in groups, so that members guarantee repayments. Over time, the services have expanded from these group loans to individual lending, and from loans to insurance, savings and fund transfers. Financially inclusive organizations also often offer interested clients an investment opportunity that generates both a social and a financial return.

For more information on Financial Inclusion, visit the FAQs of the World Bank.

Our Engagement

Credit Suisse offers its clients investment opportunities in the area of financial inclusion and microfinance. It also gives microfinance institutions access to the capital markets through the investment bank and facilitates market development and innovation through the Financial Inclusion Initiative (FII).

Because of the large and constantly growing demand for small loans and other financial services, microfinance institutions (MFIs) need access to refinancing, for example through so-called Microfinance Investment Vehicles (MIV). Demand for microfinance investments is rising steadily as they yield both financial and social returns.

Credit Suisse was one of the first financial institutions in Switzerland to recognize the potential of microloans. We have been involved in this field at various levels for many years. For example, together with partner banks we established responsAbility Investments AG in 2002 and now offer a range of microfinance investment funds in conjunction with this company.

  • By end of February 2019, the responsAbility Micro and SME Finance Fund, which reported more than 800 million USD in assets under management, had provided loans to over 436,000 microentrepreneurs in 86 countries through more than 310 microfinance institutions (MFI).
  • A private equity fund that was launched in 2007 also enables investors to participate directly in small and medium-sized enterprises and microfinance institutions. At the same time, we offer various investment and advisory services in the microfinance sector.

Credit Suisse has also collaborated to meet the industry's larger capital needs by providing a variety of advisory services through its investment bank, including the landmark IPOs for Banco Compartamos in April 2007 and the Indian microfinance institution SKS in July 2010. Credit Suisse also sponsors various international and regional conferences and symposia in the area of financial inclusion, microfinance and impact investing.

Developing Microfinance Institutions and Innovation

Around the world, only a fraction of those who need financial services are able to access them. Traditional microcredits and savings programs have proven to be effective solutions for micro entrepreneurs and low-income households in developing countries. However, as their financial needs evolve, so does the demand for more sophisticated products and services from microfinance institutions. Through the Financial Inclusion Initiative (FII), Credit Suisse works with Microfinance Institutions (MFIs) to strengthen their ability to serve the increasingly diverse financial needs of clients living at the base of the income pyramid (BOP). This is done by developing MFIs' know-how and expertise to better serve clients and innovate at the BOP and also fostering industry knowledge sharing and exchange of expertise.

Financial Inclusion Initiative

The Financial Inclusion Initiative (FII) aims to strengthen financially inclusive organizations by providing financial and human resources to train the management of MFIs, and to drive further market development.

This is done by:

  • Enabling product and services development and innovation across sectors
  • Developing strong industry partnerships and knowledge sharing
  • Effectively leveraging Credit Suisse's skills, expertise, financial and social capital
  • Continuous measurement and optimization of impact

The FII is the bank's grant and technical assistance initiative for microfinance institutions (MFIs). Launched in 2008, the FII aims to strengthen the microfinance industry, its institutions and their management.

Key Figures for 2018

1106

local employees of microfinance institutions trained

>226

thousand people with access to new or improved products and services

122

microfinance institutions and fintech start-ups benefited from our support

Implementation of the Initiative

Grants fund the implementation of projects with our global partners. Through the FII, partners engage with experts and develop new financial products and services in collaboration with Credit Suisse across their global network. They then ensure that the knowledge and expertise built up in one MFI is replicated, adapted and applied in other MFIs in different regions, building on the acquired know-how, in order to achieve even greater impact. Our partners also share their knowledge at industry conferences and events, as well as through publications. In addition, the FII supports industry coordination and development efforts and training and industry thought leadership.

The Initiative provides financial and human resources to train and develop management and to drive product and process innovation – enabling organizations to meet their social and financial goals in an efficient and responsible manner. In doing so, in addition to serving the needs of low-income households, the Initiative and our partners are building new market opportunities and mechanisms for innovative microfinance and impact investing efforts at the BOP. Our employees also contribute to this capacity building through our virtual and field volunteering efforts, such as the Global Citizens Program, in which they share their skills and knowledge directly with our partners in the field. The FII is the final link between Credit Suisse’s clients, experts and employees and the base of the economic pyramid. Together with our partners, we are finding new ways of facilitating poor people's access to financial services and advice.

Our Partners and Programs

Credit Suisse works with five carefully selected partner organizations to enable microfinance institutions to develop the people, products and processes they need to meet the increasingly diverse financial needs of people living at the base of the pyramid, including housing, agriculture and education.

Accion is a global nonprofit organization dedicated to building a financially inclusive world with access to economic opportunity for all, by giving people the financial tools they need to improve their lives.

Program

  1. Ongoing partnership with Center for Financial Inclusion (CFI), a unique "solutions lab" for the industry, icluding the leading industry initiative on consumer protection;
  2. Support of Venture Lab, an investment initiative that provides seed capital and support for early-stage start-ups in financial inclusion

Social Impact

Advance financial inclusion globally by expanding quality financial services

Business Impact

Over time, Accion has helped build 65 microfinance institutions in 32 countries on four continents

Geographical Focus

Global

Credit Suisse is partnering with the Consultative Group to Assist the Poor (CGAP) to support its work in building inclusive and responsible financial systems that help people move out of poverty, protect their economic gains and advance the broader global development agenda. CGAP is a global partnership of more than 30 leading development agencies, private foundations and national governments.

Program

Membership of CGAP to coordinate and streamline of PayGo Solar operators and financing companies to allow for most efficient access to global capital markets

Social Impact

Increased access to affordable energy solutions

Business Impact

Improved viability, stability and scalability of PayGo Solar operators

Geographical Focus

Global

Opportunity International is a microfinance organization that invests philanthropic and social impact capital in order to spark and scale innovative solutions to global poverty, particularly in the area of education. The organization has increased the number of loans available to improve the quality, availability and affordability of education in impoverished regions.

Program

Empowers Generational Change through Education Finance

Social Impact

Improved economic growth through greater access to high-quality education

Business Impact

Students and families are better equipped to afford educational costs and schools are more accessible

Geographical Focus

Africa, Asia, Latin America

Swisscontact is a business-oriented independent foundation for international development cooperation. Represented in 36 countries with more than 1,400 employees, it has promoted economic, social and environmental development since 1959.

Program

Entrepreneurial Ecosystems Initiative

Social Impact

Improved economic growth and additional jobs through targeted entrepreneurship support

Business Impact

Strengthened entrepreneurial ecosystems with increased number of viable growth companies past start-up phase

Women's World Banking works closely with 50 financial institutions from 30 countries to create new credit, savings and insurance products designed for the unique needs of women.

CEO of Women’s World Banking Mary Ellen Iskenderian: "There’s nothing micro about 1 billion women"

Program

Leadership and Diversity for Innovation Program

Social Impact

Expands access to quality financial services for low-income women

Business Impact

Equipping leaders of microfinance institutions with the training and tools to better serve the women's market

Geographical Focus

Global

Industry Initiatives and Thought Leadership

Credit Suisse participates in key industry initiatives and networks to foster the exchange of knowledge, stimulate innovation and provide thought leadership.

Credit Suisse is Part of Key Networks and Industry Initiatives

  • Global network dedicated to increasing the scale and effectiveness of impact investing
  • Addresses systematic barriers to effective impact investing by building critical infrastructure and developing activities, drives education and research.
  • European network to promote co-operation amongst microfinance bodies working in developing countries, by facilitating communication and the exchange of information
  • Drives innovative and inclusive financial sector policy, development strategy, and development modeling, based on research and good practice.
  • Swiss public-private development partnership to assist financial institutions in significantly scaling up their outreach to poor people in developing countries
  • Drives development and retention of skilled and dedicated management and staff and mobilizes funding from investors in order to maintain and grow their institutions.
  • The Smart Campaign is a global campaign committed to embedding client protection practices into the institutional culture and operations of the microfinance industry
  • Goal is to provide microfinance institutions with the tools and resources they need to deliver transparent, respectful, and prudent financial services to all clients.
  • International network to put principles for Responsible Investment into practice contributing to the development of a more sustainable global financial system
  • Addresses obstacles to a sustainable financial system that lie within market practices, structures and regulation.
  • The Asian Development Bank aims for an Asia and Pacific free from poverty. Economists, sociologists, engineers, gender experts and environmental scientists are amongst the hundreds of professions at the bank working together to reduce poverty, and ensure growth across the Asia and Pacific region is sustainable and inclusive.

Read more about how Microfinance Robustness program upgrades risk management in the Chinese microfinance sector:

Sharing Expertise

A key objective of the FII is to leverage the skills and enthusiasm of employees in order to build partner capacity, raise awareness and advance financial inclusion, microfinance and impact investing at the firm.

Credit Suisse employees can actively support the Financial Inclusion Initiative (FII) reaching these objectives through a variety of exciting skill sharing programs:

Engagement

Supporting partners with specific organizational or business challenges

Location

in the field/international

Examples

  • Development of new savings products for microfinance clients in Ghana
  • Development of financial forecasting and budgeting tools for an education NGO in Colombia

Learn more about the Global Citizens Program

Engagement

Contribute to cutting-edge research and thought leadership projects

Location

From the office/virtual

Examples

  • Frameworks for Social Investing: Cross-Country Comparisons
  • Smart Campaign (Client Protection) Endorser Feedback
  • What Makes Certification Work? Case Studies and Key Lessons for the Smart Campaign (Client Protection)

Engagement

Contribute to a global network of +1.300 members, plan regional events and awareness-raising activities

Location

In the office location

Examples

  • Regional events and awareness raising activities
  • On April 25, 2019 the Financial Inclusion Advocates Network in the Americas hosted a presentation on "Digital Innovation in Financial Inclusion within Emerging Markets" in New York City