Global Warming: How it’s Changing the Lives of the World’s Poor and What Microfinance Can Do to Help
Victims of the 2006 monsoon flooding in Ahmedabad that displaced 25,000 people. Photo Credit: Meena Kadri
While we are witnessing the adverse effects of climate change far and wide, some are experiencing it’s consequences more than others. A recent news release from the Grameen Foundation and Oxfam America examined the critical role that microfinance institutions can be part of in order to lessen the impact of climate change on poor people. The article, Climate Change and Microfinance, written by Asif Dowla, a noted microfinance expert, points to some of the key poverty-related issues that need to be addressed this week at the United Nations Climate Change Conference in Copenhagen.
The world’s 2.6 billion people living on less than $2 a day are contributing the least to global warming, yet they are paying a very high price. It is the poorest parts of the world, especially Africa and Asia, that are expected to be hit the hardest by global warming, with increased hunger, natural disasters, disease outbreaks and failing agricultural productivity. All of these factors are adding to the existing poverty and inequalities. Within the populations that will be most affected by global warming are borrowers of microfinance institutions. Many farmers, for example, who happen to be the majority of micro loan customers, have taken out loans and are only able to pay their loans back when their crop production proves to be successful. Climate change has the potential to decrease the productivity of these crops in a number of ways.
Learning from past experiences of the Grameen Bank in 1998 when two-thirds of Bangladesh was flooded for 13 weeks and the devastating 2004 tsunami in Southeast Asia, microfinance institutes are working on ways to better prepare themselves for similar disasters. Introducing and expanding the use of renewable energy, such as solar, to relieve energy poverty is one way they are pushing forward. They are also reconfiguring loans and savings products for their borrowers and increasing availability of health, livestock and other weather-related insurance. For a complete list of what is being done to prevent the suffering of borrowers in times of natural disasters, click here.
Click here to read Climate Change and Microfinance.
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