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Scaling what matters: Empowering agents with meaningful communication design

Posted on by Adityaraj

Business correspondents (BCs), the backbone of India’s financial inclusion efforts, now struggle to remain viable. BCs are agents who enable the cash-in cash-out (CICO) expansion to drive growth and financial inclusion, especially in underserved, rural, and remote areas. Most rural BC agents earn just INR 8,000 (USD 97) a month, and some make as low as INR 600 (USD 7). While BCs in a few in high-footfall areas perform better, they remain the exception.

For most BC agents, CICO alone no longer provides a sustainable livelihood. Agents face a limitation on the number and type of financial products and services, or use cases, they can provide. They face high competition, shrinking margins, and the growth of digital payment modes that bypass them altogether. As a result, multiple partners or providers face high levels of inactivity or dormancy, as much as 30% to 65%, among agents.

MSC (MicroSave Consulting) and the Airtel Payments Bank (APB) embarked on a transformative pivot to respond to this growing crisis. We enabled agents to move beyond basic cash-in and cash-out transactions, such as deposits and withdrawals, and become providers of additional meaningful, value-driven financial products.

MSC and APB used Suraksha, a basic no-frills deposit product with multiple additional features, such as hospicash insurance, cashback incentives, and higher transaction limits, to achieve this. Suraksha was designed with the low-and moderate-income (LMI) customer in mind. It reflects the financial aspirations of underserved communities and provides agents with an opportunity to earn commissions beyond standard cash transactions. Although few APB retailer outlets sold Suraksha, its customers remained unaware of the products’ features, such as insurance, cashback, hospicash, and a seamless UPI experience.

MSC and APB sought to address this challenge and drew on insights from an earlier successful intervention to combat the lack of awareness. We took lessons from a behaviorally informed communication approach that had encouraged rural women to make small deposits. Based on this proof of concept, we designed a new communication toolbox that included a suite of sales pitches, posters, banners, short videos, and WhatsApp-ready messages. The intervention did more than simply design leaflets and banners. It designed materials that agents would actually use, and customers would remember.

The toolbox resulted in a surge in adoption. The number of agents who sell Suraksha increased more than 75-fold, from just more than 4,000 in 2023 to more than 3,00,000 by 2025. Customers opened more than 3.9 million Suraksha accounts, and 80% of those accounts remain active. Suraksha has now become a best-selling product at APB, and we have redefined it as a “safe second account.” Most importantly, agents’ incomes have increased by at least 5%, as they now have more relevant use cases to offer and the confidence and capability to sell them effectively, which brings them closer to economic viability.

This experience taught us that effective communication is an infrastructure in itself for inclusive finance. We also learned how:

  1. LMI customers think in terms of households, not individuals: LMI customers often view financial risk as a threat to the entire family. Based on this insight, we redesigned the visuals to highlight families instead of individuals. This shift aligned with how rural customers interpret risks as a collective burden. It made the product more relevant and reassuring.
  2. Functionality makes collaterals more durable and relevant: The sustainability of marketing materials has long been a concern for providers. APB, too, sought durable collateral that would not be discarded or covered up over time. To address the issue, we added functional elements, such as QR codes for customer payments, to ensure that the materials served a daily purpose. This practical value encouraged agents to keep providers visible and in use for longer.
  3. Simple, accurate messaging reduces the risk of misselling: Clear, easy-to-understand communication boosted product adoption, and importantly, minimized the risk of misselling, a growing concern among regulators. Suraksha equipped agents with precise messaging to ensure they could explain bundled products confidently and accurately, which efficiently aligned what is sold with what is understood.

This experience with Suraksha reveals a crucial shift. It addresses how new products alone cannot solve the agent viability crisis. We need to reimagine how we communicate, adopt, and embed these products into the everyday lives of customers and agents alike.

As the sector looks ahead, one thing is clear: Sustainable financial inclusion will depend on what financial service providers offer and how they enable agents to deliver it. We need to empower agents with the right products and the right narratives. This will enable them to move from dormant touchpoints to dynamic engines of trust and transformation.

Although the CICO model faces challenges, it remains fundamentally sound. The model simply needs constant reimagination to serve the communities that depend on it and empower our invisible business correspondents.

“This article was first published on “The Pioneer” platform on 30th September 2025.

We have developed this blog as part of the project, Scaling agent viability and quality, funded by the Gates Foundation.

Resilience at the water’s edge: Lessons from deploying the locally led adaptation (LLA) for Inclusive financial service providers (IFSPs) toolkit in Varanasi

Posted on by Saumya Dixit

Perched along the mighty river Ganga, the holy city of Varanasi bustles at sunset with countless micro, small, and medium enterprises (MSMEs). Silk weavers in their workshops, boat-makers on the ghats, flour mills, and roadside tea stalls serve as the economic heart of the region and are repositories of centuries of tradition. Yet, today, they find themselves on the frontlines of climate change.

Heatwaves, floods, and cold snaps have become increasingly common in the Varanasi district. Seasonal floods, intensified by heavy monsoon rains and river overflow, repeatedly disrupt supply chains, damage infrastructure, and erode livelihoods. Even a short interruption in work devastates MSMEs with their already razor-thin margins as it cuts their income, creates debt, or destroys businesses entirely.

MSC sought to understand these climate risks better and explore adaptation opportunities with assistance from the Sai Institute of Rural Development. We used our Locally Led Adaptation (LLA) for Inclusive Financial Service Providers (IFSPs) Toolkit in two villages of Varanasi, Ramna and Sarai Mohana. The toolkit helps IFSPs and their MSME clients assess climate risks and cocreate adaptation strategies (see figure below). It includes six tools:

  1. Hazard mapping;
  2. Vulnerability assessment using the Department for International Development (DFID’s) five capitals framework;
  3. Identification of direct and indirect impacts;
  4. Assessment of adaptation strategies using the ACTA framework (Accept, Control, Transfer, Avoid);
  5. Appraisal and prioritization of adaptation options;
  6. Development of MSME adaptation plans and thus opportunities for IFSPs to develop, test, and deploy financial products to support them.

Our researchers held semi-structured discussions with six types of MSMEs: Shopkeepers, potters, flour mill owners, ironsmiths, weavers, and boat-makers. The findings revealed significant differences across sectors and within the same community, which underscores the importance of localized, sector-specific approaches to adaptation.

Our first stop for the study was Ramna, a village of about 3,300 people situated just 10 km south of Varanasi city. Despite some infrastructure improvements, flooding remains the dominant hazard and affects almost every enterprise.

Women entrepreneurs face particular risks. One flour mill owner, who started her business with a microfinance loan, worries that the floods will reduce the demand for flour. Floods also threaten the stability of the traditional brick structure from which she operates, possibly even the milling machine itself. Her risks go beyond the business risks and permeates into the domestic sphere where floods add dual care-giving burden to her infant alongside the responsibility to keep her mill safe. Her husband works in construction, which halts completely during floods and leaves the household doubly vulnerable. She is willing to invest in flood-proof infrastructure, but only if affordable finance is available.

Fruit and vegetable sellers face the most precarious position. Perishable stock, flooded roads, and a decline in consumer spending leave them unable to maintain their income during floods. Their adaptation strategy is to accept the risk, rely on savings, and hope for better seasons.

“Customers have no money during floods. Even if I stock goods, no one buys them,” recounts a vegetable shopkeeper from Ramna.

From Ramna, we went to Sarai Mohana, known as the “weaver’s village,” which sits precariously on the Ganga’s banks east of Varanasi. Here too, flooding is the primary hazard, but enterprises respond differently. Flooding also indirectly devastates the lives of the weavers. Although this resilient community tries to ensure safeguards against the lack of material, they face losses that threaten their livelihoods.

Beyond the looms, boat-makers on the river’s ghats face unique challenges. Power outages are common during floods, which makes it difficult to use electrical tools and lighting. Flooding disrupts orders and delays deliveries. Furthermore, any unfinished boats in low-lying areas risk being damaged or swept away.

Boat-makers seek to avoid the risk in response. When they have adequate advanced warning of impending floods, they relocate raw materials to safer areas and try to complete orders before peak floods. Yet, they cannot invest in better tools or more resilient infrastructure without formal credit. Their adaptations remain piecemeal and self-funded.

What the toolkit revealed

Several patterns emerged across both villages. Although floods are seen as inevitable, their impacts vary by sector. MSMEs from different sectors face the same hazards but respond differently due to variations in supply chains, financial models, and operational structures. Shopkeepers struggle with direct damage to goods and infrastructure, while potters and weavers suffer supply chain disruptions. Boat-makers deal more with fluctuating demand than with direct losses.

“Flooding is the same for all of us, but it breaks our work in different ways,” laments a boat-maker from Sarai Mohana.

Most MSMEs have weak physical capital, especially shopkeepers and potters who work in fragile stalls and mud-based structures vulnerable to rising waters. Most MSMEs we interviewed reported limited financial capital, while their enterprises rely on daily cash flows and minimal savings. Social networks provide some support to microentrepreneurs in Ramna, but seem weaker in Sarai Mohana, where floods affect everyone equally. Human capital is under strain as younger generations increasingly leave traditional trades and head to the city for better livelihood opportunities.

Most entrepreneurs are resigned to their fate and accept the drastic changes that floods wreak on their operations. Adaptation strategies often fall under “accept.” Few entrepreneurs transfer risk through insurance or access credit for resilience. Most cope through informal means, with low-cost “control” measures to minimize the damage. They relocate shops, stockpile materials, or diversify their income sources. We found little evidence of long-term planning or capability to finance it.

Lessons for IFSPs

The Varanasi pilot highlights the urgent need to bridge MSMEs’ adaptation needs with customized financial solutions. For IFSPs, the insights are clear:

  • Recognize adaptation as bankable: Just as we learned how boreholes or feed reserves transformed lives in Uganda, flood-proof structures, improved storage, or resilient equipment should be seen as logical and valuable investments in Varanasi.
  • Design flexible products: Seasonal repayment schedules and affordable loans for minor infrastructure upgrades could enable key adaptation strategies.
  • Bundle finance with services: Loans linked to technical advice, collective procurement, weather forecasts, and group insurance programs could enhance resilience and reduce portfolio risk.
  • Segment MSMEs by sector: Different MSMEs face the same hazard but at various points in their supply chains. Sector-focused financial products, whether for weavers, potters, or boat-makers, will be more relevant and practical than generic credit products.

From flood risk to financial resilience

Our research in Varanasi highlighted that MSMEs are well aware of the risks they face. They know floods will come, if not always exactly when. They understand where their vulnerabilities lie and already use the short-term coping mechanisms outlined above. Yet, they lack financial support to move from simple coping to planning and management. This is why they cannot move from acceptance to robust adaptation and resilience.

As one potter put it, “We know the floods will come. The question is whether our work will survive them.”

For IFSPs, risk management is both a challenge and an opportunity. Ignoring climate risks threatens loan portfolios and constrains MSME growth. However, by integrating locally led insights into product design, IFSPs can catalyze adaptation and resilience and transform MSMEs into active partners in climate adaptation. The MSMEs of Varanasi cannot afford to wait. Their survival depends on financial products that acknowledge climate realities.

Roadmap to strengthen digital transactions in Bangladesh by 2031

Posted on by Adityaraj

MSC assisted the Bangladesh Bank in charting a roadmap toward building a cashless economy by 2031. Despite widespread account ownership, digital usage remains constrained by literacy, affordability, trust, and infrastructure gaps. The roadmap defines 12 strategic goals, including reducing transaction costs, expanding connectivity, enabling interoperability, strengthening consumer protection, and promoting inclusion. These coordinated actions will accelerate adoption, enhance economic participation, and drive Bangladesh’s transition to a fully digital economy.

Scoping study to support the Bangladesh Bank to scale digital transactions in Bangladesh

Posted on by Adityaraj

The study, conducted in Singair Upazila as a microcosm, examines Bangladesh’s transition toward a cashless economy. It highlights widespread infrastructure for DFS but low-value digital transactions. Findings show adoption varies by occupation, with salaried personnel and traders leading, while farmers and daily laborers lag. Key barriers include high transaction costs, low digital literacy, trust concerns, limited merchant acceptance, and infrastructure gaps, even though DFS is valued for its convenience and efficiency.

From prayers to power: Scaling climate-smart agriculture through inclusive finance

Posted on by Saumya Dixit

In the quaint village of Thiruppachethi in Tamil Nadu, 46-year-old farmer Jayanti Amma often grappled with the uncertainties of the Samba season. Her livelihood depended on erratic rainfall and the Vaigai Dam’s water politics.

Jayanti is not alone. Countless farmers just like her across India struggle with the escalating impacts of climate change. Erratic weather patterns, such as prolonged droughts and unseasonal downpours, have led to frequent pest outbreaks, sharp yield losses, increased input costs, and post-harvest losses, which lead to falling incomes. Studies suggest average farm incomes have dropped by 15–18%. Some sectors report losses up to 25% due to unpredictable climate changes.

Climate-smart agriculture as a path to resilience

Jayanti Amma’s fortunes began to change when the local inclusive finance institution (IFI) she had been with for eight years introduced livestock loans. She and her sister-in-law purchased buffaloes for milk production. She also started to cultivate flowers along with paddy through technical support from a state-run agricultural unit.

This shift toward diversified, integrated farming brought her greater income stability. She now sells milk to a local dairy cooperative, uses paddy husk and cow dung as manure for floriculture, and markets flowers in Madurai’s bustling flower bazaar. She now has multiple sources of income, which enables her to meet each season’s uncertainty with renewed confidence. “I still look to the skies and pray for rain,” she says, “but I am no longer afraid.” Her story reflects how climate-smart agriculture (CSA) is the quiet transformation in rural India that protects our vulnerable farmers from unpredictable climate hazards.

For millions of smallholders like Jayanti Amma, CSA offers a pathway to withstand climate shocks. Promising technologies such as drip irrigation, solar pumps, no-till farming, and biodigesters can boost resilience by promoting water conservation, restoring soil health, and diversifying farmer incomes. Yet for many smallholders, especially women, these solutions remain out of reach due to the high upfront costs and limited access to finance.

Can IFIs bridge the climate resilience gap?

Inclusive Financial Institutions (IFIs) are well-positioned to catalyze CSA adoption, especially among smallholders. With deep community linkages and the ability to channel capital where it is most needed, IFIs can help close the resilience financing gap, (CGAP’s recent paper reinforces the same).While a few IFIs have piloted CSA-linked products, most IFIs’ engagement remains peripheral, limited to small-scale experiments that lack institutional commitments or clear pathways to scale.

We propose a three-level approach to get IFIs to commit and chart a pathway to scaling CSA adoption. While the strategies below focus on CSA, this template can be adapted to build resilience in other sectors, such as WASH, housing, and electric mobility. The three-level approach focuses on how to:

  • Enable access to climate-aligned capital for IFIs.
  • Reengineer IFI products and processes.
  • Strengthen ecosystem-wide support across the supply and demand sides for CSA.

1. Enable access to capital for IFIs

IFIs need access to wholesale climate-aligned debt, such as concessional loans, guarantees, blended finance, and climate-focused equity capital to deliver resilience-linked financial services, guided by green and adaptation lending mandates. This represents a significant, but largely untapped, opportunity for multilateral climate funds.

Encouraging examples of CSA financing are emerging in India, partnerships, such as Pahal-GAWA Capital, Encourage Capital-Annapurna, GiZ-Caspian-Sadhan, Annapurna-Credit Agricole CIB-Grameen Crédit Agricole Foundation, and IIX-Samunnati, show early traction in CSA financing. Institutions, such as the Agri3 fund and Rabo Foundation, which offer risk-sharing mechanisms, reduce lending risks for IFIs and complement these efforts. Globally, the International Finance Corporation (IFC) has invested USD 100 million each in debt and equity in Equity Bank (Kenya) and Banco ABC Brasil S.A. for CSA finance.

However, several ecosystem gaps persist, such as the absence of standardized CSA taxonomies and reporting frameworks, limited access to granular climate-agriculture data, and a lack of cost-benefit analyses for CSA products. These foundational gaps hinder the efficient flow of capital into IFIs. On an encouraging note, the Government of India’s draft climate finance taxonomy and the RBI’s Green Deposit guidelines are progressive steps that can help release more climate-aligned capital for CSA.

2. Product and process reengineering at the IFI level

Progressive IFIs, such as Pahal, Annapoorna, and Midland, are moving beyond traditional loans to pilot innovative financing for CSA assets, such as solar pumps and biodigesters. MSC’s research with AGRI3 across three Indian states highlights several pathways for IFIs to scale CSA lending to support high-potential CSA practices, as illustrated in Figure 1 below.

We also identified the CSA financing opportunities for IFIs based on an analysis of their current product portfolio. We proposed that IFIs can adopt one or a combination of three product strategies: Repurpose, Rejig, and Reinvent, to support high-potential CSA practices, as illustrated in Figure 2.

  • Repurpose the existing loans for income-generation (IGL), working capital (WCL), and consumer durables to finance smallholders’ investments in backyard poultry, aquaculture, vermicomposting, soil testing, CSA equipment repair centers, and smartphones bundled with digital agri-services apps. Additionally, IFIs can extend top-up loans to support the ancillary financing needs of livestock borrowers.
  • Rejig existing loans to support income diversification and resilience. Redesign IGLs by increasing ticket sizes and tenure. This approach would finance business resource centers (BRC) that distribute organic fertilizers in local markets. IFIs can raise the ceilings of WCLs (Working capital loans) to support CSA enterprises, such as BRCs and custom hiring centers (CHCs), that provide farm equipment for rent. This would ensure their operational viability across at least two cropping cycles
  • Reinvent products such as asset loans to help smallholders acquire CSA assets such as drip irrigation and bio-digesters. IFIs can provide crop loans to support a shift to climate-resilient contingent crops. IFIs should expand offerings to include livestock insurance for enhanced climate risk mitigation through partnerships.

To strengthen the full credit cycle—outreach, assessment, disbursement, tracking, and risk management—IFIs should collaborate with agritechs (for farm-level data), for performance-based incentives (despite some concerns), government schemes, Original Equipment Manufacturers, and social enterprises. Additionally, IFIs need to invest in three core areas:

  • Staff capacity building: IFIs can improve staff capacity through training on CSA appraisal tools. Institutions, such as the National Institute of Bank Management and Sa-Dhan, already offer programs for IFI staff to deploy green and CSA finance.
  • IT system upgrades: IFIs can handle flexible loan tenures, differentiated pricing, and adaptive risk scoring for CSA lending.
  • Operational de-risking: IFIs can use geotagging, the Internet of Things (IoT), and machine learning tools for real-time CSA monitoring.

These interventions will raise awareness of climate risks within IFIs, equip them to respond actively, and address the gaps highlighted in this MSC–Sa-Dhan study.

3. Ecosystem efforts to prime both the supply and demand sides

Scaling CSA finance requires a supportive ecosystem that empowers farmers, nurtures innovators, and builds financing pipelines. Some promising initiatives include:

  • Grassroots programs, such as the NRLM’s Krishi Sakhi initiative and the Tata Trusts’ Lakhpati Kisan, which integrate CSA into rural livelihood programs.
  • Startup incubators, such as ThinkAg, AgHub, and a-IDEA, which offer mentorship and seed capital to CSA innovators.
  • Government innovation challenges and digital platforms, such as Agri Stack, which support product development, pilot testing, and scale-up through data access and public-private partnerships.
  • Blended finance facilities, such as NABARD’s AgriSURE Fund, which supports growth-stage agri-startups with patient capital, technical guidance, and market linkages.

 From pilots to scale

As climate change erodes borrower incomes, especially among smallholders and microentrepreneurs, IFIs can feel the strain on their credit portfolios. Diversification into resilience-linked products such as CSA offers a dual opportunity to strengthen customer resilience and expand their own product offerings. IFIs can lead a new wave of climate-smart finance where prayers persist, but power returns to farmers like Jayanti Amma. The shift has begun, quietly but surely, in villages like Thiruppachethi.

A USD-1.5 trillion opportunity: Inclusive finance for climate adaptation

Posted on by Saumya Dixit

In today’s world, we do not have a shortage of ideas for climate adaptation. We have an excess of talk and a shortage of delivery. Public money, while valuable, cannot bridge the massive USD 187–359 billion gap to finance climate adaptation on its own. We need to mobilize private finance at scale. And we need to do it where climate change’s impacts are felt most acutely: In local governments, micro and small enterprises, smallholder farmers, and particularly vulnerable households.  

What the need looks like on the ground 

The Findex 2025 report highlights what we at MSC have seen for ourselves. Climate shocks are now routine for low-income communities. 35% of adults in low-income countries report that they suffered a natural disaster or weather shock in the past three years. Two-thirds of these adults lost income or assets, while the poorest 40% were one-third more likely to be hit than others.  

Yet interestingly, three in four people affected already have an account with a financial service provider. That combination of high exposure and financial access provides a real opportunity to move beyond talk and into action.  

If we are to target finance effectively, we must separate local adaptation needs into three distinct but mutually reinforcing buckets: 

  1. Local governments that build resilient infrastructure; 
  2. MSMEs and smallholder farmers who adapt business models and assets; and 
  3. Households that absorb, anticipate, and adapt to shocks.  

Local governments: capital at scale, closer to citizens 

Counties and municipalities shoulder the work on infrastructure, which includes flood defenses, water systems, heat management, resilient roads, irrigation, and waste-to-value plants. This infrastructure provides the foundation on which MSMEs and agriculture depend. For these projects, local governments need well-structured, long-term finance.  

Green municipal bonds, for example, have financed water storage and flood defenses, such as Cape Town’s USD 83 million issue in 2017, which was oversubscribed four times. Meanwhile, Kenya’s County Green Preparation Facility bundles county pipelines, runs feasibility studies, and prepares projects for local capital markets, including potential green bond issuance. Such aggregation reduces transaction costs, raises bankability, and keeps accountability local, without the often-debilitating challenges of foreign exchange risk.  

MSMEs and agriculture: the overlooked engine of resilience 

In low-income countries, MSMEs and smallholder farmers employ around 70% of the workforce. Yet they receive just around 2% of global climate finance. We cannot afford this mismatch, especially since MSMEs and the agriculture sector are the “missing middle” of climate finance and often provide periodic employment to the most vulnerable households. 

The great news is that we already have an effective delivery system in the shape of inclusive financial service providers (IFSPs), which comprise microfinance institutions, cooperatives, banks, and mobile-money providers. IFSPs serve people from the low- and moderate-income segment every day, at scale, with trusted, transparent systems built over the past 50 years. They already lend about USD 1.5 trillion a year to small businesses. We need to use that infrastructure and take advantage of that remarkable private sector capital base for locally-led adaptation … and thus make every climate dollar go further.  

MSMEs and smallholder farmers need a range of products that span working capital and capex loans, savings, insurance, and digital payments. With the right tools, they can turn recurrent shocks into manageable risks through investments in drought-tolerant seeds, solar pumps, raised homesteads, boreholes, and engagement in diversified livelihoods. 

Blended finance, which comprises first-loss guarantees, concessional credit lines, and derisking insurance, has already unlocked private lending to MSMEs in programs, such as Ghana’s Boosting Green Employment and Enterprise Opportunities. Toolkits are now available to help IFSPs design climate-responsive products for these needs.  

Particularly vulnerable households: Social protection plus inclusive finance 

The poorest households often lack borrowing capacity and need grants and timely cash to rebuild and adapt. Targeted social protection (including disaster compensation) and community-level adaptation funds are essential. After the shock of COVID-19, governments have been working to digitize payments, cut leakage, and speed up the delivery of help to those in need.  

Well-designed programs, such as the KALIA initiative in India’s Odisha state, blend transfers, insurance, and interest-free loans so families can adopt improved seeds and diversify their income. Social protection and inclusive finance are complementary pathways for these people to build resilience.  

The hidden $1.5 trillion channel—still mostly climate-agnostic  

The network of IFSP worldwide reaches deep into vulnerable communities, knows clients, and already moves money with systems that regulators trust. Three in four adults in low- and moderate-income countries now can access formal financial services.  

However, most IFSP lending remains climate-agnostic, which is a significant missed opportunity. Unless we pair scarce public and philanthropic dollars with this channel, we will not be able to take advantage of local capital markets, crowd in private finance, and increase lending for adaptation.  

A rising risk we must manage 

Ignoring climate risk will not make it go away. MFIs and banks are already seeing higher portfolio-at-risk where floods, droughts, and storms intensify. In Pakistan, after repeated flooding, many MFIs reduced or even stopped lending in the hardest-hit districts. In parts of Africa, MSC’s scenario analysis, based on climate projections, suggests PAR could double in three years without adaptation support. If we do not de-risk IFSPs with blended finance, many will retreat from high-vulnerability areas.

So, what can concerned stakeholders do in this situation? Here is our eight-step agenda to manage the risk of climate adaptation finance: 

An eight-step practical agenda 

  1. Support regulatory provisions that allow innovations in climate finance. Create time-bound innovation windows to test new climate-finance instruments. Use regulatory sandboxes, fast-track approvals, and proportionate compliance for pilots. Build in safeguards to prevent misuse, and reward proven innovations that direct capital to underserved, climate-vulnerable sectors.
  2. Aggregate projects for local governments. Replicate Kenya’s County Green Preparation Facility model: prepare pipelines, standardize documentation, and bundle smaller projects to reach capital markets—including green municipal bonds, while technical partners manage feasibility, procurement, and ESG.
  3. Create adaptation guarantee windows for IFSPs. Create funds to offer pooled first-loss and pari passu guarantees to support lending to MSMEs and smallholder farmers for adaptation; structure them to reward lending in high-vulnerability districts and penalize green-washing.
  4. Provide concessional, climate-tagged credit lines. Channel low-cost capital to IFSPs that commit to product innovation, such as pre- and post-disaster credit, seasonal grace periods, emergency “pause and extend” options, larger and longer tenor loans, and asset-backed financing for adaptation.
  5. Build the product toolbox. Cofinance research and development and rollout of flexible loans, parametric insurance, and hybrid savings-credit products mapped to anticipatory, adaptive, and absorptive capacities. BURO-Bangladesh’s portfolio shows how standard loans, emergency loans, disaster loans, and contractual savings can be refined to meet a range of climate-driven needs.
  6. Provide contingent liquidity. Establish disaster-linked liquidity facilities that automatically extend line-of-credit top-ups to accredited IFSPs after a trigger event; quick liquidity prevents clients from being compelled to sell assets and protects IFSPs’ solvency post-shock. 
  7. Layer social protection with finance. Pre-register poor and climate-exposed households, digitize IDs and accounts, and build shock-responsive cash triggered by forecast and satellite indices. Tie grants to optional top-ups, such as low-premium insurance or savings matches, through existing IFSP rails. 
  8. Hold ourselves to LLA principles. Use IFSPs to deliver patient and predictable finance, invest in local capabilities, use community networks to improve risk diagnostics, and double down on transparency and accountability built into inclusive finance over decades. Public money should crowd in private capital and not crowd it out. 

This agenda uses the systems and pipes we already have. The IFSP rails that already move value to and from the last mile. It aligns incentives: IFSPs grow sustainably, clients get products that respond to rapidly evolving climate realities, while public funders see measurable leverage. The Green Climate Fund has demonstrated meaningful leverage ratios of up to 1:5.5 for blended finance. With appropriate structures, similar multipliers are achievable through the IFSP network.  

The call to action 

The adaptation finance conversation often revolves around the same old problem: too little money and not enough absorption capacity. Inclusive finance gives us a way to address both. The network is built, many of the clients are on-boarded and the regulators are already engaged. Now we must repurpose this infrastructure for climate adaptation and thus enable resilience. 

Today, we stand at an inflection point. We can either keep talking about the gap in finance for adaptation or use the inclusive finance system we have spent five decades building to close it. We must now unlock the USD 1.5 trillion already flowing each year through IFSPs, blend it with public de-risking, and deliver locally-led adaptation at the speed and scale the climate crisis demands.