Solene Favre, Global Insurance Director, VisionFund International
Solene Favre
Typhoon Haiyan

Boosting financial access amidst the climate crisis

The climate crisis is the greatest threat to human health in the 21st century. This threat is particularly true for women and girls, who face higher risks and experience the disproportional burden of climate change impacts. 

We witnessed this during our journeys to Uganda, where World Vision studied the nutrition crisis in a warming world. The study shows how connected the climate crisis is to human health, especially for women and girls. Overexposure of women to carbon monoxide as they prepare food using non-efficient cook stoves exposes them to respiratory and cardiovascular diseases secondary to exposure to poor air quality and lung infections. As part of women's daily chores, they collect water and wood in extreme heat temperatures, endangering their health. Breastfeeding mothers feed their babies outside bed nets, exposing them to various illnesses like malaria. These are just a few examples of the health impacts that women and girls face due to climate change. 

As I take you back from the lived realities of a woman, a wife and a mother from Uganda, I am sure you can agree that addressing climate change is not just a priority but an urgent necessity. The health and well-being of women and girls are at stake, and we cannot afford to wait.

Our vision for every child, life in all its fullness, informs our programmatic and financial inclusion approaches as World Vision and VisionFund to addressing climate change health impacts on women and girls. By providing greater and inclusive access to financial products and services, we can help these communities build resilience and adapt to the health impacts of climate change, thus contributing to Sustainable Development Goal 3. 

VisionFund is established to support World Vision programmes to lift families, especially women and children, out of poverty through the power of financial inclusion. For over 20 years, VisionFund has focused on delivering products and services that promote financial inclusion and contribute to climate adaptation and resilience in rural areas.

Recognizing that climate change is an underlying driver of poverty, gender inequality, and social exclusion, World Vision and VisionFund are implementing an eight-year program called "Transforming Household Resilience in Vulnerable Environments" (THRIVE 20230). The program aims to shift mindsets and promote collective action, financial inclusion, and local value chain development to help families lift themselves out of poverty. 

Among the program's highlights is the provision of loans to savings groups, which are predominantly composed of women, to allow its members to grow their small businesses. This would eventually allow them to prioritize the health and education of their children. A savings group is a self-managed group of 15-25 people, composed of 79% women, who save and lend money to each other at an agreed monthly interest rate. However, we do recognize that as members grow their small businesses, there is a need for more capital than what is available through the group alone. VisionFund, therefore, offers loans between $1,000 – $1,500 to savings groups working together for at least two years.  

VisionFund also provides insurance products for health, life, and agriculture, enabling rural families to guard against emergencies, accidents, or impacts of climate change. 

In addition, the organization develops innovative climate-smart products for smallholder households to mitigate or adapt to the impacts of climate change. This involves investing in efficient energy such as biogas, efficient cookstoves, and solar power and providing training and support for their use. 

To support climate change adaptation and disaster preparedness efforts, VisionFund also implemented insurance products that provide a financial safety net for families facing unforeseen events. 

In 2013, we first developed the recovery lending approach for those whose livelihoods were destroyed by Typhoon Haiyan (locally called 'Yolanda') in the Philippines.   This approach involved providing targeted recovery loans to clients, ensuring that they could repair fishing boats, re-open small stores, and get back to earning for their families. We have seen that recovery loans boosted clients' working capital so that they can restart their income-generating activities following an event. From this experience, we observed that recovery lending should be affordable and not lead to over-indebtedness, enable rapid recovery, and anticipate recovery products before a disaster happens. 

In the face of these learnings, we launched a disaster insurance scheme in 2018 that enables the recovery lending practice to improve the financial resilience of poor and vulnerable families and institutions during disasters. We also replicated this approach during COVID-19, which showed very positive outcomes. In Kenya, our survey showed that 91% of people say their quality of life has improved, 88% declare they used their loans to grow or start their business, and 92% said there was no other product available to them to help them recover their business after the effects of the lockdown and covid-19.

These success stories prove the transformative power of financial inclusion in the face of climate change. By providing greater and inclusive access to financial products and services, we are not just helping those often left behind to uplift themselves now. But we are also investing in a sustainable and equitable future for their children.