A Swiss multi-year core contribution will strengthen UNCDF’s ability to deploy risk-absorbing finance and crowd in public and private capital in least developed countries’ underserved markets.

The Government of Switzerland, through the Swiss Agency for Development and Cooperation (SDC), and the United Nations Capital Development Fund (UNCDF) have signed a new agreement providing core funding for UNCDF from 2026 to 2028.

The multi-year contribution will enable UNCDF to strengthen its ability to incentivize capital flows for impactful investments in early-stage markets, especially in Least Developed Countries, Small Island Developing States and countries in fragile settings. In a deliberate effort as articulated in the organization’s new Strategic Framework under a new leadership team, UNCDF will be ultimately contributing to job creation, sustained economic growth and equitable prosperity.

“Switzerland’s multi-year contribution is an important vote of confidence in the recent reforms that were introduced to make UNCDF’s focus more current, in a world where there is a deliberate move away from pure aid-based solutions to leveraging the power of markets” said Pradeep Kurukulasuriya, Executive Secretary of UNCDF. “Predictable and flexible core funding enables UNCDF to act early, take calculated risks and develop the instruments and investment pipelines needed to make markets investable. We are deeply grateful for Switzerland’s longstanding partnership.”

“Switzerland values UNCDF’s distinctive role to change risk perceptions and create the conditions for larger flows of public and private capital to underserved markets, including from development finance institutions and multilateral development banks,” said Manuel Etter, Assistant Director General and head of the Multilateral and NGO Division at the Swiss Agency for Development and Cooperation. “Through this multi-year contribution of approx. $6.5 million, we support the implementation of UNCDF’s Strategic Framework and continue our strategic engagement on results, financial sustainability and operational performance.”

Across early-stage, high-risk markets where UNCDF operates as per its UN General Assembly endorsed mandate, access to finance remains structurally constrained. Markets are often thin, risk perceptions are elevated, and domestic financial systems lack the depth required to channel capital to local economies. UNCDF addresses these constraints by deploying catalytic, risk-absorbing financial instruments and providing investment advisory to make transactions possible where they would otherwise not occur.

Core resources complement UNCDF’s programme funding by providing the flexibility and institutional capacity needed to originate and structure investments, manage risk and portfolios, strengthen impact measurement and test financing approaches that can subsequently be replicated and scaled, especially in the least developed of developing countries. This support is particularly important in early-stage and last-mile markets, where investment opportunities require patient preparation and targeted risk absorption before larger financiers can engage.

UNCDF’s Strategic Framework 2026-2029 brings together three integrated capabilities: micro, small and medium-sized enterprise finance, subnational finance, and digital finance. The Framework aims to expand access to better capital for underserved enterprises, households and communities; build stronger domestic financial systems capable of intermediating capital sustainably; and mobilize greater volumes of public and private investment aligned with national and local priorities.

In 2025, UNCDF supported sustainable financing initiatives in 67 countries, including 36 Least Developed Countries and 16 Small Island Developing States. Approximately 3.3 million people engaged with UNCDF-enabled solutions, two-thirds of whom were women. Through its catalytic financial instruments, UNCDF helped mobilize $32 million and catalyse an additional $18 million, unlocking a total of $50 million across 19 countries.

The agreement builds on Switzerland’s longstanding support to UNCDF, through both core funding and targeted non-core contributions. Over the next three years, SDC and UNCDF will continue their strategic dialogue, including on the evolution of UNCDF’s Integrated Results and Resources Framework indicators, financial sustainability and operational performance on the ground.

At a time of constrained development resources and growing financing needs, the renewal continues a longstanding SDC–UNCDF relationship spanning core and non-core contributions, including SDC’s role as anchor investor in UNCDF’s financial derisking capability that can support the UN Development System.