Positive operating result for SIFEM in 2019 - and uncertain outlook for 2020 due to the COVID-19 crisis
Bern (ots)
In 2019, the Swiss Investment Fund for Emerging Markets (SIFEM) committed a total of USD 104.5 million across nine different projects and concluded the year with a positive operating result of CHF 5.1 million. However, the outlook for SIFEM's portfolio in 2020 has taken a sudden negative turn in the face of an unprecedented global pandemic and a resulting economic slowdown in developing countries. Collaboration with the private sector in emerging and developing markets will be essential to overcome the present crisis.
At the end of 2019, SIFEM, the Development Finance Institution of the Swiss government, posted a positive operating result of CHF 5.1 million. This result confirms the soundness of SIFEM's investment strategy and shows that the gradual diversification towards debt instruments, initiated during the previous strategic cycle, is starting to bear fruit by reducing the volatility of the financial results.
In terms of new investments made in 2019, SIFEM committed a total of USD 104.5 million across nine projects. Four investments were made in private equity funds serving small and medium-sized entreprises (SMEs) and fast-growing local companies in South-East Asia and Sub-Saharan Africa, including a fund which is managed by Development Partners International (DPI), one of the very few women-led private equity managers in the entire African market. Also, five loans were made to financial institutions targeting micro, small and medium-sized businesses in different sectors, covering Cambodia, Kenya, Kazakhstan, Mongolia and Georgia.
By the end of the second year of the 2018-2020 strategic period, most of the Federal Council's strategic objectives for SIFEM were within reach. However, the health of the portfolio has suddenly become fragile and volatile due to the global impact of the COVID-19 pandemic and a resulting economic slowdown in many developing countries, which can be observed now and may become more severe in the coming months.
SIFEM Chairman, Jörg Frieden, has asserted that "SIFEM will help SMEs and fast-growing local companies in Africa, Asia and Latin America to overcome the current crisis because their survival is essential to the economic and social stability of their country. The mandate of SIFEM and the collaboration with the private sector in developing countries are now more important than ever." The ability of SIFEM and other Development Finance Institutions (DFIs) to mobilise financial resources and to bring technical expertise to companies in emerging and developing markets can play a crucial role in the resolution of this crisis of unprecedented scale.
At the SIFEM Annual General Meeting on 6 May 2020, the Business & Financial Report 2019 and the audited Financial Accounts 2019 were approved. Also, the SIFEM Board members have been elected for another 3-year-term of office.
More information on SIFEM's annual figures can be found in the Business & Financial Report 2019.
SIFEM - www.sifem.ch
SIFEM, the Development Finance Institution of the Swiss government, was established in its current form in 2011. SIFEM is wholly owned by the Swiss government. The shareholder rights are exercised by the Federal Council, whilst the State Secretariat for Economic Affairs (SECO) remains in close contact with the SIFEM Board of Directors and Obviam, the fund management company.
SIFEM is an important instrument for fostering private sector development in emerging and developing markets, complementary to other measures of economic development cooperation by the Swiss government.
As an impact investor, SIFEM provides financial support to commercially viable small and medium-sized entreprises (SMEs) and fast-growing local companies, which in turn helps to create jobs and reduce poverty. At the end of 2019, SIFEM had made commitments totalling USD 1.059 billion. As of mid-2019, SIFEM had invested directly and indirectly in 531 companies in over 75 countries. The investee companies are supported in complying with and exceeding the requirements of internationally-recognised environmental, social and governance standards (ESG).
Contact:
Simon Denoth, Obviam Communication Manager, SIFEM Head of Public
Affairs, sdenoth@obviam.ch, +41 31 310 09 38