[Fireside chat] EMA 2019 retrospective: Client resilience to climate change

  • Frédéric HUYBRECHS, IOB – University of Antwerp
  • Sam MENDELSON, European Microfinance Platform (e-MFP)


Sam MENDELSON, author of e-MFP's publication Adapting to a New Normal, explained the objective of this session, which was to present the success factors that had emerged from the 2019 European Microfinance Award on ‘Strengthening Resilience to Climate Change’.

Mendelson looked back at the ten semi-finalists of 2019, and their approaches to increase the resilience of their clients to climate change. He once more stressed the vulnerability of the populations in low-income countries, facing the biggest threats as a consequence of climate change, but having the least resources to implement climate change adaptation measures. Financial institutions can play a crucial role in offering products and non-financial support that help their clients build resilience to climate change.

Mendelson continued by providing an overview of the three main approaches employed by the financial institutions’ climate change initiatives that reached the Award’s semi-final:

  • Increasing resilience to unpredictable and high impact external shocks;
  • Helping clients adapt to a changing climate;
  • Strengthening institutional resilience.

The speakers then shortly presented each semi-finalist and the related initiative’s main takeaways. Among several cross-cutting key factors for success were:

  • Establishment of partnerships: partnerships with the private sector that contribute technical assistance and partnerships to exchange best practices with other stakeholders;
  • Adaptation to the local context: partnering with local research institutes and targeting local value chains;
  • Taking a pro-active approach: helping clients to move from responding to adapting to climate change;
  • Promotion of income diversification and good agricultural practices: supporting clients to implement mixed production systems with resilient crops;
  • Diversification of portfolio: offering a combination of financial products and non-financial services;
  • Finance for the long-term: align financial products with the cash flow of clients, and support them during times of crises.

Two initiatives were extensively discussed. The climate change initiative of the Tinh Thuong Microfinance Institution, which serves mainly women in coastal areas of Vietnam. Their clients face challenges related to extreme weather events and income stability. The MFI introduced a ‘Disaster risk reduction and climate change adaptation fund’ to build client resilience to external shocks. The approach is unique in the way that its capacity-building activities are based on two-way and intense communication between the MFI and its underserved clients. Trained clients disseminate knowledge on weather information and climate change adaptation techniques, which creates a collective organisational movement and a sense of ownership. Moreover, the MFI reached out to other stakeholders to share insights in their initiative and its impact, and advocated for efforts on climate change adaptation from public institutions.

The other climate change initiative that has received more attention from the speakers during the discussion, is the one of the Muktinath Bikas Bank in Nepal. They have won the  European Microfinance Award 2020 “Encouraging Effective & Inclusive Savings”. Nepalese smallholder farmers struggle with extreme weather events that affect their traditional production calendar. The bank has designed a microloan to implement climate-smart agricultural practices to improve climate change resilience for smallholder. Next to client capacity building activities, the internal staff has been trained on climate-smart techniques as well. The commercial lending department has integrated these practices and offers a climate-smart agricultural loan. What makes this initiative stand out further is the deployment of a survey to measure the socio-economic and environmental impact of the climate-smart interventions under the Muktinath Bikas Bank’s initiative.


Frédéric HUYBRECHS started the discussion with stating that smaller initiatives tend to integrate community engagement and climate change adaptation activities to offer more complete and proactive support to their clients. According to him, initiatives with a smaller reach can inspire larger initiatives to keep focused, and ensure direct communication with their clients. Therefore, he argued that by choosing the winner of the 2019 European Microfinance Award, the European Microfinance Platform missed the opportunity to highlight outstanding smaller, more proactive climate change initiatives. A statement could have been made to underline the urgency of climate change by highlighting initiatives that offer responses to structural challenges faced by vulnerable communities.

According to Huybrechs there is still progress to be made to move beyond financial product offerings, meaning towards community engagement within the broader context and dynamics of exclusion and sustainability issues in the most vulnerable sectors.

Mendelson closed the session by reiterating the urgent need for action by the microfinance sector to help build resilience to climate change.