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As El Niño-driven droughts and intensifying hurricane seasons push millions into crisis, one question is reshaping disaster finance: what if communities built financial resilience before the storm hits? This episode explores two pioneering models — from Barbados and the Horn of Africa — proving that preparation can mean the difference between a shock and a crisis.
We examine how Barbados has built a layered national disaster financing strategy and why digital payment infrastructure is just as critical as the funds themselves. In the Horn of Africa, the DRIVE Project (De-risking, Inclusion and Value Enhancement of Pastoral Economies in the Horn of Africa) uses parametric insurance to protect pastoralists from drought, and how intentional product design has ensured that 55% of its beneficiaries are women.
Guests:
• Dr., The Most Honorable Kevin Greenidge, Governor, Central Bank of Barbados
• Hope Murera, Managing Director and Group CEO, ZEP-RE
With a contribution from Charity Mueni, Community Mobilizer, DRIVE Project, Kenya
Producer: Lamis Daoud, CGAP External Affairs Officer
Audio Editor and Sound Producer: Samantha Malhotra, World Bank Group Interactive Media Program
Executive Producer: Jahda Swanborough, CGAP Communications Lead
© CGAP/World Bank, 2026
Transcript
Dr., The Most Honourable, Kevin Greenidge: "Whether a shock becomes a full-blown crisis financially, economically, or just a loss of three months of work, but we're up and running, depends on your preparedness for it and your ability to get funds readily moving, and what you have done before that event to build resilience."
Lamis Daoud: When a hurricane tears through a small island nation or a drought scorches farmland that an entire family depends on, the disaster itself is devastating. But what comes next can be even more so.
Every time a shock hits and there's no safety net, families and communities don't just lose what they had; they lose what they could have had. Children leave school. Livestock is sold. Future harvests never get planted.
So the question becomes: how do you ensure that when disaster strikes, the money is already there and moves fast to the people who need it most?
Hello and welcome to this episode of Inclusive Finance Frontiers, a podcast by CGAP. I'm your host, Lamis Daoud.
Today we explore two answers from two very different parts of the world. Barbados, a small island economy in the Caribbean, has built a layered disaster risk financing approach that treats every dollar of potential damage as a dollar that must be pre-covered. And ZEP-RE, is a pan-African reinsurance institution and serves as the primary regional implementing agent for part of a World Bank Group project, called DRIVE, that is designed to protect farmers and herders across the Horn of Africa from recurrent droughts.
The lesson from both cases is clear: resilience depends on the architecture around the finance: the rules, delivery systems, partnerships, and public backing that determine whether support reaches people before shocks become crises.
One important instrument within that architecture is insurance. More than a financial product, it is an essential risk management tool that helps individuals prepare for, cope with, and recover from shocks. It enables people to invest in revenue-generating activities with confidence, and this is quite important for women seeking to establish and maintain their own economic independence.
To understand why insurance and, more broadly, disaster finance architecture matter so much, we need to understand what's at stake for climate-vulnerable nations with limited fiscal room to absorb shocks. We spoke with Dr., The Most Honourable, Kevin Greenidge, Governor of Central Bank of Barbados.
Dr. Greenidge: "Shocks are now becoming the norm. Outside of the natural disaster shocks, there's also shocks in terms of the international environment, increasing all commodity prices, etc. Both the central bank and the government ministries work hand in hand in terms of economic policy and coordination. In that regard, we think preparing and building resilience within our framework is central. At the same time, we also spend considerable time ensuring that our response and our ability to recover when a shock hits is very quickly."
Lamis Daoud: "Recovery" is the keyword and Dr. Greenidge is careful to distinguish between a shock and a crisis. That gap, he argues, is entirely a function of preparation.
Dr. Greenidge: "Whether a shock becomes a full-blown crisis financially, economically, or just a loss of three months of work, but we're up and running, depends on your preparedness for it and your ability to get funds readily moving, and what you have done before that event to build resilience."
Lamis Daoud: So how does Barbados translate this into practice?
Dr. Greenidge: "We view that from a kind of a layered financing approach so that the estimated cost of a damage, every dollar of that should be covered beforehand by some form of insurance, whether it be contingency measures in budget in terms of fiscal space, whether it be space in terms of your debt levels or space in terms of your reserves, whether it be, for example, we've embedded clauses in, on our debt stock that gives us a pause on both coupon and principal in case of a shock, whether it be a regional insurance facility like our CRIF, Caribbean Catastrophe Insurance, whether it be at the level of FIs like, um, the World Bank, DDO bonds, the export. So, you have to prepare beforehand."
Lamis Daoud: Fiscal buffers, debt clauses, regional catastrophe insurance… Each layer activates at a different level of speed and scale. Some kick in within days; others provide longer-term fiscal space. The key takeaway is that no single mechanism is sufficient; it's the combination that builds true resilience. And speed matters enormously.
Dr. Greenidge: "We have the regional insurance that kicks in maybe in between two weeks. Government, of course, will have provision some sort of social protection and social flows that goes to persons to help them rebuild very early. We can't just wait on that. So as soon as possible, things have to get up and running."
Lamis Daoud: But even when the money is there, it doesn't automatically reach the people who need it most. In many countries, insurance payouts from regional facilities can take months to filter down from governments to households. Barbados is directly tackling this "last mile" problem.
Dr. Greenidge: "Perhaps the most important equation in that is the ability to move the funds that are available, whether it's from government's purse, whether it's from an insurance policy that kicks in, whether it's microinsurance for fishing industries, et cetera, to who need it at the time they need it. What we are doing to ensure that happens now is we are implementing instant payment system, a state-of-the-art payment system."
Lamis Daoud: When regional insurance is paid out, it often takes months to reach the people who need it most, trickling through government systems, physical banks, paper processes. With an instant payment system, where every person has a digital wallet, money can move within hours of a disaster trigger being met. A fishing family can buy supplies to repair their boat, and a household can pay for emergency shelter materials without waiting for a bank branch to reopen or a government office to process paperwork.
Barbados launched its instant payment system in mid-June 2026, and Dr. Greenidge explains why this infrastructure is inseparable from disaster resilience.
Dr. Greenidge: "Without such a payment system, even though you have funds available for households and personal recovery, you can't get it to them in time. In fact, in terms of a natural disaster, banks may be closed, physical and financial institutions may be closed because it's unsafe to open. But without not-- a proper system in the hy- the superhighway of the financial system, persons can get what they want."
Lamis Daoud: Barbados shows how disaster finance can be designed at the national level. But getting money to people quickly also depends on systems much closer to the ground. In dryland Africa, ZEP-RE — a pan-African public-private reinsurance institution — is working to extend insurance and financial inclusion to some of the continent's most vulnerable communities. We spoke with Hope Murera, Managing Director and Group CEO of ZEP-RE, which was set up about 35 years ago by member states of the Common Market for Eastern and Southern Africa (COMESA).
Hope Murera: we look at disaster risk financing as a resilience issue, not just an insurance issue, and we approach it at an ecosystem level. We realize that insurance is great, but also resilience is not brought by just a payout."
Lamis Daoud: For ZEP-RE, a payout is only useful if the recipient has a bank account to receive it, has seeds good enough to make the next season viable, and has the knowledge to understand what insurance actually does for them. So, ZEP-RE builds all of that simultaneously.
Hope Murera: "We approach it by holistically looking at what are the other factors that will create resilience. Uh, so in the programs that we run, for example, in addition to designing the right products for the, you know, specific communities, we engage the public sector, we engage governments, we engage regulators because we need the right environment. We not only, you know, not only on the insurance side of things, but financial inclusion means also access to banking. So, we bring in banks so that the people we are dealing with have bank accounts."
Lamis Daoud: And the products themselves are designed around the realities of farmers and herders. It's not transplanted from mature markets but is built from the ground up. Parametric insurance is a product where preset triggers like rainfall deficits are measured by satellites to determine automatic payouts. Such products remove the need to send assessors into remote areas after a disaster. Ultimately, digital platforms mean money moves into the pockets of farmers and herders within hours of a trigger event.
Hope Murera: "We've only been able to reach people because we looked at it as how do we make sure that insurance is bundled with other services, bundled with saving bundled with loans, the training, better husbandry practices, and most importantly, how do we connect them to market? So, when we look at disaster risk, we look from one angle to the rest. How do we use platforms to make sure, digital platforms to make sure that they are paid straight, we get money into the pastoralists' pockets in a matter of hours. Using, of course, parametric products helps because then you have the preset triggers, and you're not going to go on the ground to try and assess the risk."
Lamis Daoud: But product design is only half the battle. The other half is trust, and that requires meeting people where they are, through messengers they already believe in.
Hope Murera: "So how you move it from the boardrooms, the meeting rooms where we talk about all the insurance companies down is, what we've done is engaging at the local level. So the people that we call, uh, community mobilizers, the people that reach out to these, uh, these people, are people that they know, right? Religious leaders, teachers, people that own kiosks, people that they know every day. But they're not just selling them insurance. They're introducing them to opening bank accounts. They're introducing them to better seeds. So you create a whole, um, better solution and better value proposition than, you know, you can insure if there's no drought you get paid kind of thing. But the other thing that has really worked for us is 'cause, mobile penetration is done pretty well on the continent, just embedding within that. So within hours they're able to see money in their pockets, right?"
Lamis Daoud: And ZEP-RE has been deliberate about who benefits. In farming and herding communities, livestock is gendered: men typically own cattle, while women own smaller animals like goats and sheep. A program that only covers cattle inadvertently excludes women. DRIVE program was designed to address this directly.
Hope Murera: "So in the programs we run, the biggest one being DRIVE, 55% of our beneficiaries are women. But we had to be very intentional because women own mostly the smaller animals, the goats. We made a focus on that because if you go for the cows alone, mainly the men own the cows. But if you also make sure that you're mobilizing around the smaller animals, then you get more women."
Lamis Daoud: Charity Mueni is a Community Mobilizer for the DRIVE project, based in Kenya. In this role, she works directly with herders to build awareness of livestock insurance and empower them to safeguard their livelihoods.
Charity: "We were previously stuck with small, struggling projects, but [then] I joined this project and worked hard... In 2024, we received our first commission. When I got that commission, it was a good amount of money, and I was so happy because I already had a project I wanted to start."
Lamis Daoud: With that money, she registered Smart Future Diversification Farming — a business she leads as CEO — dedicated to empowering youth in her community.
Charity: "We deal with indigenous vegetables, indigenous chickens, and indigenous seeds. In that office, we have a seed bank where we preserve all types of indigenous seeds, and it earns us money every single day. Through this project (DRIVE), when I built those offices, I was able to reach youth and young mothers whom I have empowered, and today they are proud to have food on the table every afternoon. I was able to support myself as a woman and support my family. I paid school fees for a whole year and even advanced for two years for my two children who are in high school.
I am so grateful because my husband saw the impact, appreciated it deeply, and now supports the project."
Lamis Daoud: This is a strong example of gender inclusion in practice yet achieving it at scale requires both intentional design and a supportive regulatory environment, two areas where significant work remains.
Hope Murera: "Most of the regulations in our countries also have been adopted from, from the West and from mature markets. So we are playing a catch up and are we really having the right mechanism, the right environment to allow the innovation."
Lamis Daoud: ZEP-RE's response is to bring regulators along on the journey and not wait for them to catch up.
Hope Murera: "So every year we actually host a regulator forum, and the whole idea is to move with them. So for every structural issue or otherwise, we try to say how do we, as people on the ground. How do you distribute micro products at an affordable level? Um, digital money has helped and that we also are bundling a lot and working greatly with the telcos to make sure that this happens."
Lamis Daoud: Every season, ZEP-RE also runs another round of training, building awareness in local languages through radio and short messaging service (SMS), and critically, making sure communities are present when payouts happen. Trust in insurance is built not just by selling, but by celebrating when the promise is kept.
Hope Murera: "We have, uh, radio and, and SMS messaging in their local languages that tells them why this is important. When there is a payout, we get them involved so that they, you know, they get also part of the credit for doing that. For the local leaders, for their elected local leaders, it's very, very important to have their support on that. And because these are government-led projects, we pull in central government, we pull in local government, we pull in even NGOs that have influence that have been there for a long time. And, and this way, that partnership does bring it faster than if you were going to do it on your own."
Lamis Daoud: Both cases, Barbados and ZEP-RE, point toward the same larger truth: resilience is built before disaster strikes through systems deliberately designed to move quickly, cover risk, and connect public institutions, private markets, and development partners.
Dr. Greenidge is direct about what he wants to see from the international community.
Dr. Greenidge: It's important that the international community and those who want to provide funding and assistance in that retreat to the development of these payment systems as a tool of resilience building and offer support in that area. It's not about just trade, it's about building resilience in your financial system that supports the rest of the economy and development during a crisis."
Lamis Daoud: For Hope, the reforms needed vary from data infrastructure and donor coordination to regulatory transformation.
Hope Murera: "We are actually now talking about the new African financial architecture by the African Development Bank, looking holistically at Africa's financing needs so that at the end of the day you're creating independence and resilience. So there are many things that need to happen. We definitely from an insurance perspective, we need a lot of better data to price, to model, to be able to predict better. We need satellite data that is affordable and available and specific because, you know, you use data sets that are not necessarily applicable to the areas we're doing. But we are getting there."
Lamis Daoud: There's another structural problem that Hope names plainly: fragmentation.
Hope Murera: "But governments also must look at ensuring their risks, especially around disaster refinancing, as not something that comes after, but something that comes at the forefront. This is the precursor to financial inclusion. One of the other issues that could do better is donor fragmentation also. So you find that every donor is sort of funding one different project. So if we could also be able to pool all that, because insurance needs pooling, it needs scale, so that we move from pilots, pilots to something that is scalable."
Lamis Daoud: ZEP-RE is demonstrating that reaching the most vulnerable communities requires more than insurance; it requires an ecosystem with the right products, the right channels, and the right partners. Barbados is demonstrating that a small island economy can build layered protection that covers every dollar of risk, and that a digital payments highway can close the last mile between a payout and a person in need.
That's the end of our podcast today. Thank you so much to Dr. Greenidge and Hope for speaking to us and to Charity for sharing her experience.
And of course, thank YOU, for joining us for this episode of Inclusive Finance Frontiers, a podcast by CGAP. I'm your host, Lamis Daoud.
For more information on our work in inclusive finance and other topics, please visit our website at cgap.org.
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