[Event Recap] Webinar 2: The State of Inclusive Financial Services & Global Evidence on Strengthening Climate Resilience | Disaster Risk Financing Solutions for Climate-resilient Livelihoods in the Agricultural Sector
“The State of Inclusive Financial Services & Global Evidence on Strengthening Climate Resilience”, the second webinar in the Disaster Risk Financing Solutions for Climate-resilient Livelihoods in the Agricultural Sector knowledge series, was held on July 13, 2023. The webinar focused on climate-responsive financial products, their practical applications, and the global implications of innovative products on enhancing climate resilience.
Peter Zetterli (Senior Financial Sector Specialist, Consultative Group to Assist the Poor [CGAP]), presented his thoughts on the landscape of climate-responsive financial products and high-level findings from a global study conducted by CGAP on the role of financial services in climate adaptation. He emphasized that the range of climate-responsive financial products is very narrow and heavily centered on agricultural index insurance, with providers citing a lack of data and expertise. While financial services can enable climate adaptation by offering diverse services like savings, insurance, credit, and remittances as part of risk management strategies, the risks from climate change to financial institutions need to be well-understood and actively managed. This is crucial to ensuring that climate change does not push back financial inclusion. Finally, he pointed out that there is an urgent need to address the needs of women, who are more vulnerable and face greater exposure to climate shocks than men, and yet have fewer financial risk management tools.
Rehana Riyawala (Vice President, Self-Employed Women’s Association [SEWA]) presented the key lessons gathered by the membership-based association (comprising 2.5 million women) through its livelihood resilience approach. SEWA creates awareness on climate change, provides contingency finance to protect members’ livelihoods in the event of climate shocks, helps micro enterprises build a credit record and facilitates their inclusion into the formal financial system. Rehana highlighted SEWA’s main instrument —the Livelihood Recovery and Resilience Fund (LRRF) —a US$1 million fund that is expected to scale up to US$12 million in phase 2. LRRF has enabled financial protection and helped build resilience among more than 65,000 people since 2022.
The final presentation of the webinar, delivered by Xavier Giné (Lead Economist, Development Economics Research Group, World Bank Group), highlighted global evidence on the impacts of financial innovations that have been developed to address risk taking and adaptation. While financial products like insurance and credit can improve ex post smoothing and help individuals cope with the aftermath of climate shocks, studies have shown mixed results regarding their impact on climate adaptation. Further, there has been a gradual shift in the use of index insurance from catastrophe/extreme events (large infrequent payouts) to non-catastrophe events (small frequent payouts).
The presentations were followed by an engaging question-and-answer session. The event, which was facilitated by Qhelile Ndlovu (Financial Sector Specialist, Crisis and Disaster Risk Finance, World Bank Group), was attended by over 130 participants, including practitioners and policymakers.
About the Knowledge Series:
The ‘Disaster Risk Financing Solutions for Climate-resilient Livelihoods in the Agricultural Sector Webinar Series’ aims to further deepen knowledge on agriculture insurance, and enable global knowledge exchange and collaboration among practitioners, technical counterparts, and policymakers of developing countries in designing and implementing disaster risk financing for agriculture. The series comprises four webinars delivered 4-6 weeks apart. Each webinar will be accompanied by a detailed fact sheet summarizing the key learnings. (View resources from the previous webinars here). The webinar series offers a chance to achieve a World Bank-endorsed participation certificate. This knowledge series builds on the success of the first knowledge series, ‘Strengthening Financial Resilience in Agriculture’ that was delivered virtually in 2021-2022 (click here for more information).
Click here to download the webinar fact sheet:
Watch the recording of the webinar here.