IIF is a highly effective solution to facilitate climate adaptation. It has the potential to reach between 100 and 145 million beneficiaries by December 2025.
The target clients for the fund include those with less than USD 15 per day who live in official development assistance countries and are exposed to extreme weather conditions. IIF utilises investment into local MFIs and insurance companies through loan and equity as well as technical assistance to catalyse the impact of the investment.
The positive impact of climate insurance
|Financial stability and resilience||– Farmers are able to better manage their risks; they are not forced to resort to negative coping strategies such as selling their productive assets, reducing food consumption or migration|
– Climate insurance allows farmers to sustain their income and to continue farming even if a harvest is lost
|Better access to funding||– Climate insurance at the household level allows farmers an easier access to credit, providing partial security|
– Favourable funding of MFIs insuring their portfolios may indirectly benefit farmers through better terms
|Productivity and innovation||– Better credit availability allows farmers to invest in technologies that boost their productivity|
– Improving farmers’ risk taking capacity can lead to investments in higher quality seeds and crop protection, ensuring a more stable harbest
|Better future||– Farmers are not forced to remove their children from school during periods of financial stress; they can provide their children with a better education|
– As farmers are not forced to start from scratch each time but rather are able to invest in their productivity and innovation capability, climate insurance enables them to create savings in the long run