It is widely acknowledged that a bottom-up approach actively involving businesses and stakeholders on the ground in emerging and developing countries is essential for driving climate change adaptation finance as local companies and communities are directly affected by climate change.
Small- and medium-sized enterprises (SMEs), which should focus primarily on their own adaptation while also having the potential to offer products or services that can help their clients and partners adapt to climate change, are crucial stakeholders in this context. They often play a dominant role in the private sector in developing and emerging countries and should thus be driving forces in localised climate change adaptation. However, despite the fact that local businesses and communities are in urgent need of suitable financing instruments, SMEs on the ground face significant financing challenges in many developing and emerging economies, particularly with regards to climate change adaptation.
This Innovation Brief presents six innovative bottom-up adaptation financing approaches from the SEED Practitioner Labs Climate Finance 2018 in India, Thailand and Uganda, and shares overarching learnings about challenges and solutions. The Labs support creativity, innovation, and co-creation through its participative and collaborative prototyping methodology. Through this approach, the Labs facilitated the development of various prototype solutions for adaptation financing with a focus on SMEs. These include among others microinsurances, financing models for climate-smart irrigation systems as well as information platforms and make use of innovative technologies, digital solutions and blockchain-based approaches.