The Asian Development Bank (ADB) has unveiled a new project in the Philippines called the Asia-Pacific Climate Finance Fund to provide climate-smart insurance for micro, small, and medium-sized enterprises (MSMEs) (ACliFF).
The climate-smart insurance initiative is the Vulnerable Twenty Group’s (V20) new Sustainable Insurance Facility’s (SIF) inaugural project.
MSMEs are underserved and, in some cases, unreachable by insurance markets leaving them highly vulnerable to climate and disaster shocks.
Supporting MSMEs’ resilience to climate change and disasters benefits not only the entire economy, but also the business owners, employees, and communities they serve, many of whom are vulnerable and low-income.
ADB manages ACliFF, a multidoor trust fund. It was founded with money from Germany’s Federal Ministry of Economic Cooperation and Development (BMZ), which would be used to promote the climate-smart insurance scheme.
One of the four key areas for the financial risk management solutions funded by ACliFF is addressing the effects of extreme weather events. The fund will also look into potential collaborations with the V20’s SIF in other Asian and Pacific countries.