The Connection Between Climate Change and Financial Inclusion.
Improving access to a diverse range of financial tools in rural communities play an essential role in the resilience and adaption of rural communities to climate change.
Nigeria is experiencing its worst flood, which has killed many and left millions of people displaced. A contributing factor to this unfortunate event is climate change, and it’s a sad truth that Africa has poor climate adaptation. Little or no actions are taken to prepare for and adjust to both the current and projected impacts of climate change.
Many low-income communities are the most vulnerable to extreme weather and environmental risks as it concerns climate change. These communities suffer the impact of climate shift on a larger scale. They experience a lack of infrastructure, poor livelihoods, income loss, displacement, food insecurity and an increase in poverty level. Many of them are left with no options other than to adapt to the changing climate conditions and their new realities.
Low-income and rural farming communities have been most impacted by the floods in Nigeria. The existing inequalities in society are even more evident as these communities are struggling to access help.
Rural communities lack enough financial resources to deal with the effects of climate change. They are unable to access digital financial inclusion facilities to progress through climate risks. Financial services are no doubt helpful to empower low-income and vulnerable people for climate change events and recovering from losses when these unfortunate events happen. As a fact, families in low-income areas are more likely to be uninsured, which makes it more difficult for them to recover from these disasters. If these families are able to access insurance policies, they will be able to protect themselves from huge losses. When these communities can access financial savings products, they can rely on their savings to weather through the storm. Also, access to micro loans can help them rebuild their businesses.
Improving access to a diverse range of financial tools in rural communities play an essential role in the resilience and adaption of rural communities to climate change. Climate change indeed affects everyone, but individuals in rural communities are hit the hardest.
Inclusion Times Newsletter
Join the newsletter to receive the latest updates in your inbox.