Role of Financial Inclusion in Climate Change Adaption and the SDGs

Issue Brief
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Financial inclusion, which aims to provide appropriate financial services to disadvantaged and economically marginalised segments of society, contributes to both sustainable development and climate change adaptation.

The creation of enabling regulatory frameworks, guidelines and supportive infrastructure by governments is key to the further development and extension of appropriate financial services for the poor.

Delivering appropriate financial services to poor households requires novel delivery methods and products. In Bangladesh, non-governmental organisations that have developed strong trust relationships with the communities and have an organisational culture of experimentation and learning have proved effective actors for designing and delivering all types of microfinance services.

Customisation and diversification of financial products, as well as the packaging of financial with non-financial services, such as skills training (microfinance-plus), will yield greater benefits for participants in microfinance schemes.

As the impacts of climate change and vulnerability differ from one area to the next, continual location-specific action research is needed in areas vulnerable to the impacts of climate change to develop new packages of financial and non-financial services that support resilience building and adaptation. How financial inclusion can best be integrated into local and national level adaptation strategies also needs to be studied.