The Swiss Investment Fund for Emerging Markets (SIFEM) is the development finance institution of the Swiss Confederation and a cornerstone of Swiss development cooperation. The purpose and basic mandate are described in the Ordinance on International Development Cooperation and Humanitarian Aid as well as in the Ordinance on Cooperation with the States of Eastern Europe. SIFEM was established in 2005 and took over the investment portfolio of SECO (State Secretariat for Economic Affairs) which had been built up since the late 1990s.
SIFEM promotes long-term, sustainable and broad-based economic growth in developing and emerging countries by providing financial support to commercially viable small and medium-sized companies (SMEs) as well as fast-growing enterprises which in turn helps to create secure and permanent jobs and reduce poverty.
The task of the Swiss Investment Fund for Emerging Markets (SIFEM) is to promote long-term, sustainable and broad-based growth in developing and emerging countries. This is achieved by providing financial support to assist the growth of commercially viable small, medium and fast-growing companies. The company is able to create new jobs. A regular income helps to reduce poverty and alleviate migratory pressure. A strong private sector in turn generates taxes which allow the government to make investments in public infrastructures and social welfare.
The private sector is the most important driver for sustainable growth in developing and emerging countries. However, obtaining the necessary financing for their growth is a tremendous challenge for small, medium-sized and fast-growing companies. Local banks will only lend to a limited extent and will usually require personal guarantees. Access to the capital market remains largely barred to SMEs.
SIFEM will invest in either local or regional risk capital funds, or make long-term capital available to local banks and other financial institutions. The investment companies and financial institutions will in turn support local SMEs and fast-growing companies with this capital.
SIFEM also actively advises local investment companies, for example in formulating their investment strategies and in the actual investment process.
The investment companies and SIFEM will support the companies in their portfolio not only with growth capital, but also with the introduction of new technologies, with improving their production processes, with sales and marketing, and with the compliance of environmental, social and governance standards.
SIFEM invests primarily in sectors that are particularly important for the economic development of partner countries. This includes sectors such as the manufacturing industry, transport, storage, communication, wholesale and retail trade, production of renewable energies, health and education.