Role of Financial Inclusion in Climate Change Adaption and the SDGs

Over recent decades, many initiatives around the world have developed financial services specifically for poor households, who normally would not have access to this type of support. Impact assessments have found that strong links exist between financial inclusion and sustainable development. Poor households with access to appropriate and flexible financial services are often able to diversify their income sources and increase their assets. Well-designed microfinance systems can contribute to community solidarity and women’s empowerment. Access to microfinance also reduces household vulnerability to shocks. Financial services have thus been recognised as an important target and means of implementation for the SDGs. The Paris Agreement emphasises the importance of climate-proofing, which is also relevant for soft interventions such as financial services. This session will discuss how the full potential of microfinance for the SDGs and climate change adaptation can be realised through innovative delivery models and products, especially micro-insurance, based on collaboration between governments, service providers, researchers and funding organisations.