2022-12-10-亚开行-建设城市贫民的抗灾能力_小额信贷机构使用的灾难风险融资解决方案的潜力（英）_8页_317kb

Building Resilience of the Urban Poor: Disaster Risk Financing Solutions for Microfinance Institutions

Background

Climate change and geophysical shocks increase urban poverty in emerging economies. The urban poor are vulnerable to extreme weather, seismic events, and pandemics due to limited access to basic services and infrastructure. Rapid urbanization in countries like Bangladesh and Indonesia compounds these risks, with events such as tsunamis, earthquakes, and floods being frequent.

Key Challenges

Microfinance institutions (MFIs) serving urban poor populations face balance sheet disruptions after geophysical shocks, reducing their capacity for recovery lending. These events harm client livelihoods, leading to loan defaults or withdrawal from savings, which hinders community resilience.

Disaster Risk Financing Solutions

Disaster risk financing (DRF) tools are designed to provide rapid funding to MFIs immediately after shocks. These include:

• Parametric protection: Event-based triggers (e.g., tropical cyclone categories) for automatic payouts.
• Contingent credit and capital: Subordinated debt that converts to capital via structures like options, forgiveness, or risk transfers from global markets.
• Examples include insurance products for ENSO in Peru and parametric-based programs from VisionFund International and Enabling Qapital.

Operational Mechanics

• After a shock, DRF mechanisms allocate funds for recovery loans, blending reserves, contingent credit, and risk transfers. For instance, a stylized tropical cyclone example shows tiered payouts supporting client rebuilding.
• Commercial lenders and global risk markets facilitate funding, ensuring liquidity for MFIs.

Recommendations

1. Establish an Emergency Liquidity and Capital Fund (ELCF) in countries like Bangladesh and Indonesia to encourage DRF adoption by providing premium support and blending finance from donors.
2. Scale innovative DRF programs through institutional partnerships and blended finance, overcoming market failures that limit MFI participation.
3. Focus on women-focused lending to enhance resilience among MFI clients.

Benefits

DRF enables sustained MFI lending, improves resilience for clients and communities, and supports poverty reduction in the face of climate change.