13 October 2025; 13:00-14:00 GMT+1
Presenter: Graham A.N. Wright
Biography
Graham A. N. Wright is the founder of MSC Group, a development consultancy that has pioneered the market-led approach to sustainable development. With over thirty years of experience in the field, Graham’s expertise lies in the application of business principles to financial, economic, social and environmental challenges. He is also a reformed Chartered Accountant, with five years of experience in management consultancy, training and audit. Today, he heads teams working on strategy, innovation & product development, marketing & communication and process & risk analysis for financial, social and economic inclusion as well as digital public infrastructure, fintech, digital financial services, agriculture, health, gender, climate change, and AI in nearly fifty countries across Africa and Asia. He has also worked extensively on organizational development, training, research and evaluation for the usual alphabet soup of donors.
Paper/article to be presented
Authors: Adrian Fenton, Jouni Paavola, Anne Tallontire
Link to paper: The Role of Microfinance in Household Livelihood Adaptation in Satkhira District, Southwest Bangladesh – ScienceDirect
Additional webpage: Climate Resilience and Adaptation, and Building the resilience of BURO Bangladesh’s customers to the impacts of climate change
Additional blogs to read: A segmented approach to LLA: Challenging the orthodoxy: Can we rethink finance for locally-led adaptation?
Overview of one of the applications of the comprehensive LLA for communities toolkit: Galvanizing climate resilience through locally-led adaptation: Lessons from India’s most vulnerable communities. We are finalizing the similar blog for the MSME version.
Session Highlights
Graham Wright has shared the slides he used during his presentation: 25.10.13 MCRILG Session October 13_slides from Graham Wright
Developing countries face a rapidly escalating adaptation finance gap — up to USD 565 billion annually by 2030 — yet most funding remains donor-led, grant-based, and insufficient. MicroSave Consulting (MSC) argues that financial services are a critical but underutilised tool for climate resilience. Households already anticipate, absorb, and adapt to shocks through savings, credit, and informal lending, but they need inclusive, well-designed financial products to do so effectively. MSC’s work in Bangladesh, Nigeria, and India shows that tailored financial instruments — from early-action finance and flexible credit to microinsurance and climate-smart agriculture loans — directly support anticipatory, absorptive, and adaptive capacities. By leveraging existing financial infrastructure and mobilising private capital, inclusive finance can make every climate dollar go further and empower communities to lead their own adaptation pathways, transforming locally led adaptation from dialogue into measurable resilience outcomes.
Rethinking Locally-Led Adaptation (LLA)
The traditional approach focuses on participation and dialogue but treats communities uniformly. Wright proposed a three-tier structure:
- Top tier: Local governments – infrastructure and capital investment
- Middle tier: MSMEs/agriculture – access to credit and financial services
- Bottom tier: Vulnerable households – grants, social protection, public works
This vertical model better aligns financial instruments with distinct adaptation needs.
Inclusive Finance as Adaptation
Citing Global Findex (2025) data, Wright highlighted that:
- 1 in 3 adults in low-income countries faced a climate shock in the past three years.
- 75% already hold financial accounts.
He called this an opportunity to use inclusive finance and blended capital to drive adaptation, mobilising part of the $1.5 trillion in private finance available globally.
MSC’s LLA Toolkit
Wright introduced MSC’s Locally-Led Adaptation toolkit for financial service providers to assess:
- Climate hazards and exposure,
- Vulnerability via DFID’s five capitals framework, and
- Adaptation options using the ACTA approach.
The toolkit aims to enable MSMEs to climate-proof their businesses and help institutions design climate-aligned products.
“CTA is key in risk reduction.”
Gendered Impacts of Climate Change
Climate events disproportionately affect women, intensifying unpaid care work, limiting mobility, and increasing gender-based violence. Wright emphasised integrating gender-responsive financial tools within adaptation frameworks.
Household Strategies and Finance Needs
Drawing on the BRACED 3As framework—anticipatory, adaptive, absorptive capacities—Wright showed how poor households combine strategies to manage shocks:
- 70% rely on absorptive measures (savings, borrowing, asset sales).
- 60% use adaptive practices (agroforestry, improved breeds).
- 40% take anticipatory actions (rainwater harvesting, early planting).
Key insight: Financial flexibility is critical—rigid loan repayment schedules don’t match erratic climate patterns.
Financing Gaps and Product Innovation
Most households still rely on informal finance: 36% sell assets, 20% borrow from relatives, and only 17% use MFI loans. Standardised products constrain adaptation.
“When rains don’t come on time, repayment still does.”
BURO’s response includes introducing flexible, climate-linked loans and savings products such as:
- Contractual savings for long-term resilience,
- Disaster loans for rapid liquidity,
- Climate-resilient agriculture loans bundled with insurance.
Wright called contractual savings “the quiet side of adaptation.”
Institutional Transformation: BURO’s Three-Phase Strategy
BURO is reforming through a staged approach:
- Repurpose: Redirect existing loans for climate-resilient inputs.
- Rejig: Modify loan structures to increase flexibility.
- Reinvent: Create new disaster loans and Climate Emergency Savings Accounts (CESA), and launch climate smart agriculture loans bundled with index-based insurance.
“Resilience and profitability aren’t opposites, they’re the new frontier of inclusive finance.”
Q&A
Question: How can MFIs or donors meaningfully measure the success of climate-resilient financial products beyond loan repayment metrics?
Answer: Use qualitative analysis, tracking client stories, behavioural shifts, and vulnerability reduction, to capture real resilience outcomes.
Question:
What is the role and purpose of Inclusive Financial Service Providers (IFSPs)? Are they profit-maximizing firms, and could they administer grant funding for anticipatory climate adaptation given their local knowledge and networks?
Answer:
Inclusive Financial Service Providers vary in their structures; some are not-for-profit, while others aim for profitability to ensure sustainability and attract capital. Most balance social mission and financial viability.
Grant funding remains essential for the most vulnerable populations, especially those not reached by financial service providers. However, mixing grants and loans can lead to confusion and repayment challenges. Grants are best used strategically, for example through blended finance models that help de-risk lending in climate-affected areas, rather than being administered directly by financial institutions.
Question:
Why do microfinance institutions tend to prefer loans over insurance as mechanisms for disaster response and climate adaptation?
Answer:
Insurance is often mistrusted due to slow payouts and complex claim processes. Parametric insurance—triggered by measurable events—offers potential, particularly when supported by digital infrastructure. Loans, however, remain the preferred mechanism for financing large-scale adaptation projects such as irrigation systems. Combining insurance with loans can help de-risk longer-term investments, which are typically viewed as risky due to potential climate-related repayment issues.
Comment:
Introducing insurance in rural or farming communities can be difficult, as many farmers cannot afford upfront premiums. It is important to understand risk from the community’s perspective and design financial solutions that reflect their lived realities.
Response:
Bundling insurance with loans, such as life insurance linked to credit, can simplify access and improve uptake. Nonetheless, climate-related insurance products may become increasingly expensive, raising concerns about their long-term viability in highly climate-affected regions.
Comment:
High insurance premiums are often driven by administrative costs. Automation and parametric insurance—where payouts are automatically triggered by predefined events—can help reduce these costs. There is potential for insurance products in lower-income communities, but they must be designed through research that reflects local realities, possibly through community-led models.
Response:
Traditional social coping mechanisms such as reciprocity are being eroded under increasing climate stress. Financial solutions should therefore be designed around local economic conditions to realistically build resilience. While grants and safety nets remain vital for the most vulnerable, cost-effective and context-sensitive financial mechanisms are key to supporting broader climate adaptation.