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SPI Journal, Spring 2023
Connecting the dots

Boosting women’s economic resilience to climate change

Appropriately designed financial instruments are crucial to ensuring women can withstand disaster risks, explain Malika Shagazatova, social development specialist (gender and development), and Ma. Piedad Geron, microfinance policy specialist at the Asian Development Bank.


Disasters brought about by natural hazards and extreme weather conditions impact women and men differently due to differences in socioeconomic status, ownership of assets and access to resources. Basic services and assistance, particularly during disasters, are ‘gender neutral’ and do not consider unequal gender roles and the discrimination women face in many societies. In view of this, gender disparities are exacerbated and make women more vulnerable to disasters compared to men.

Women face multiple barriers to accessing and using financial services. Most of the barriers are a result of sociocultural practices and norms, but some barriers are institutional or merely infrastructure-related. These include a lack of identification documents, lack of or insufficient assets that can be used for collateral, mobility constraints and limited financial literacy. Other barriers to women’s account ownership include perceptions of the utility of accounts, lack of financial products that cater to women’s needs, lack of credit history and the high costs of dealing with financial service providers.

Lack of sex-disaggregated data limits FSPs’ understanding of women’s specific financial needs. Without relevant sex-disaggregated data, FSPs have difficulty designing products that are tailored to women and appreciating the commercial viability of women as a client segment.


Figure 1. Financial inclusion, disaster preparedness and coping mechanisms

Source: ADB, Financial Instruments to Strengthen Women’s Economic Resilience to Climate Change and Disaster Risks


Financial inclusion can reduce women’s vulnerabilities and strengthen their economic resilience. Very few financial instruments are designed to address the specific needs of women to reduce risks, prepare for disasters and transfer such risks to insurance companies. The use of credit, savings and/or insurance allows women and women-led businesses to anticipate, prepare and eventually absorb the negative impacts of a disaster by creating assets, smoothing consumption and accessing emergency assistance. In the event of a disaster, financial instruments are also used for relief and recovery measures.

For women to access these financial instruments, they should have features that address specific gender barriers. An important element is financial literacy, which provides women with the knowledge, information and tools to make informed financial decisions and prepare them for unexpected financial shocks brought about by disasters.

Women tend to be more risk averse than men, and prefer to use savings during emergencies and for business expansion or investments. Appropriately designed savings products will help women prepare for disasters. Loan products designed to finance women’s business and/or livelihood expansion can generate additional income and surpluses for precautionary savings and enhance women’s resilience to disaster risks.

Direct insurance is offered directly to individuals through distribution channels. For women, it’s important that these products offer premium affordability, use of familiar distribution channels and the option to bundle it with other financial products such as savings and/or credit. With indirect meso-insurance, stakeholders that directly work with and for women are the policyholders and they determine how the insurance claims will be distributed to members. This is a good start to orientate women on the important benefits of insurance.

Owning an account in a financial institution to which governments or donors can transfer cash assistance facilitates women’s access to aid during disaster recovery. New emergency loans at minimal cost and with longer/relaxed repayment policies are important at this stage. These loans can be used by women to repair damaged assets or purchase new income-generating assets. Some FSPs reschedule or write off loans of affected clients.

The most suitable option for enhancing women’s economic resilience to disasters appears to be precautionary savings and insurance. While credit may be used to finance risk-reducing infrastructure and recovery efforts, the impact on a woman’s financial wellbeing should be carefully considered, as repaying the debt may impact women’s living standards. Compared to loans, savings and insurance products are better suited for women, particularly those in the lower-income bracket.

Savings and insurance products should, however, be designed to address specific gender barriers faced by women. An important consideration when designing financial instruments for women is to use accessible and familiar channels and agents. Some women prefer to deal with female agents and/or distributors of financial products and services.

Digital financial services play an important role in financial inclusion and enhancing economic resilience to disasters. Digital technology, along with a well-developed payments system, good physical infrastructure, appropriate regulation and vigorous consumer protection safeguards can facilitate women’s access to and use of financial products and services.

Using digital technology to provide cost-efficient and tailored financial products and services can help to strengthen women’s resilience. In the aftermath of a disaster, digital financial services can be used to facilitate and expedite cash transfers during relief operations. Similarly, digital financial services can also facilitate remittances from family and friends who are not affected by disasters.

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