Photo by Md. Mahabub Hossain Khan/2016 CGAP Photo Contest
Building Resilience
Over the last few years, our world, economies, and markets have been enduring multiple crises with increased frequency and intensity—from climate disasters and health shocks to humanitarian crises. In view of all these crises, achieving just some of the sustainable development goals (the SDGs) by 2030—including eliminating poverty, hunger, and gender inequality—looks grim based on the current trajectory.
It is vital for any development agenda, including financial inclusion, to consider how poor and vulnerable households, who will be amongst the most affected by crises and have the least strategies and tools to anticipate and cope with them, can build resilience and adapt to the crises impacting their lives. So, what is the role of financial services in bolstering resilience?
Inclusive finance can play a key role in helping people living in poverty prepare for, cope with, and adapt to various shocks that vary in nature, intensity, frequency, and duration. While the role of financial services in promoting growth and poverty reduction is still debated and empirically unresolved, there is a robust evidence base showing that they can help prevent people from falling deeper into poverty.
For example, reliable savings and remittance products can help smooth consumption during periods of crises and help speed recovery after shocks. Credit products can help the poor invest in risk-reduction measures like irrigation, hardier seed varieties, or the transition into new livelihoods and diversified sources of income.
CGAP’s work on resilience over the past few years brought a deep analysis into the role financial services can play in mitigating humanitarian crises, particularly for the forcibly displaced. More recently, we shared insights around the COVID-19 pandemic and inclusive finance in terms of the response of the MFI sector, and the emergence of government-to-person payments, and the role of agent networks in extending digital financial services and ultimately expanding financial inclusion. CGAP is also working on understanding how financial services can build climate resilience for people living in poverty and for rural women, in particular.
Going forward, we are looking forward to collaborating with funders as we explore ways in which they can improve financial market systems in fragile countries that provide their populations with tools to build long-term resilience.
In view of the frequent and intense crises witnessed in recent years, it is vital for any development agenda to consider how poor and vulnerable households, who will be amongst the most affected by crises and have the least strategies and tools to anticipate and cope with them, can build resilience and adapt to the crises impacting their lives. Inclusive finance can play a key role in helping people living in poverty prepare for, cope with, and adapt to various shocks that vary in nature, intensity, frequency, and duration.
Fragile countries are behind—and falling further behind—their nonfragile peers in measures of poverty and financial inclusion. Inclusive finance plays a critical role in building resilience for low-income people living in fragile contexts.
The world has changed dramatically in the last few years, from climate change to political unrest. What role can inclusive finance play in building resilience for people facing crises?
The next frontier for improving food security lies in financing investments that drive sustainable productivity gains among more nutritious agricultural value chains, resulting in more affordable nutritious food that is produced sustainably.
Access to insurance plays a crucial role in building resilience. Insurance is an essential risk management tool that helps individuals prepare for, cope with, and recover from shocks.
A2ii is a global partnership that works with insurance supervisors to promote inclusive and responsible insurance, thereby reducing vulnerability.. As of July 2025, CGAP convenes A2ii in close coordination with IAIS.
While the need to expand opportunity for the poor has historically animated the financial inclusion community, it is high time we recognize the equally critical role of resilience building and expend similar effort in service of that goal.
Women, especially those in low-income countries, are faced with higher risk, greater vulnerability, and fewer tools to cope with the impacts of climate change. Financial services can empower women to manage climate risks and build resilience.
Cash-in/cash-out agent networks are key to extending digital financial services and ultimately financial inclusion. Providers have struggled to extend these agent networks in rural areas, where sparse populations lead to lower transaction volumes and weaker financial incentives for businesses to serve as agents.
The world faces urgent challenges as risks intensify and interconnect, amplifying vulnerabilities, especially for low-income populations and small and medium enterprises (MSEs). If left unaddressed, these vulnerabilities can create ripple effects with national, regional, and global consequences. This paper highlights the importance of inclusive finance as an indispensable component of resilience responses, and calls on everyone working on increasing resilience to leverage inclusive finance to enhance the reach, speed, and impact of their work.
Cash transfers are among the most effective tools for social protection but delivering them in fragile contexts remains a major challenge due to interruptions in financial sector development efforts, limited government capacity, and difficulties reaching remote communities. Leveraging the financial sector for cash transfers improves outcomes for both programs and recipients. Drawing on emerging evidence from highly fragile contexts, the paper presents ways that social protection funders can invest to achieve these gains.
Already reaching over half the world’s population, social protection systems present an untapped opportunity to channel climate funds to help vulnerable communities adapt to climate change, enhancing the reach, efficiency, and impact of climate finance.
As carbon markets evolve from niche climate interventions into a multi-billion-dollar industry, a critical truth is emerging: gender inclusion is no longer optional. It is essential to the permanence, equity, and scalability of carbon projects.
Early evidence from Pakistan confirms the need to shore up the financial institutions that serve vulnerable populations facing climate impacts, as climate risk threatens to undermine global progress on financial inclusion.
CGAP's Impact Pathfinder provides insights into the role of financial services in building the resilience of vulnerable populations and small businesses globally.
