A new climate insurance programme designed to increase access to finance and provide disaster recovery lending to some of the worlds poorest people was launched today.
The African and Asian Resilience in Disaster Insurance Scheme (ARDIS) will provide cover to farmers and small businesses in Kenya, Malawi, Mali, Zambia, Cambodia and Myanmar this year.
It is thought to be the world's largest non-governmental programme of its kind, and will meet 1% of the G7 goal to provide 400 million people in developing countries with insurance products that protect against climate risk.
"ARDIS uses an innovative financing structure making recovery lending scalable," said Michael Mithika, president and CEO of VisionFund International, which launched the project.
"This scalability means greater opportunities for more people to access emergency finance to restart businesses and restore incomes."
The scheme is part-funded by the UK's Global Parametrics and the German InsuResilience Investment Fund, while Swiss-based impact investment manager BlueOrchard Finance will manage the project.
Recovery lending will be provided through VisionFund's microfinance institutions, with loans disbursed immediately during and after disasters to help clients maintain or restart economic activities.
Global Parametrics' advanced climate-based data modelling verifies the climate event and triggers access to both contingent liquidity and risk capital via VisionFund's institutions.
This injection of funds restores balance sheets, ensuring business continuity or enhancement of operations and services, despite the common disruptions created by environmental calamities.
"African and Asian countries are highly vulnerable to the effects of climate change and natural catastrophes," InsuResilience Investment Fund chairman of the board, Stefan Hirche, said.
"We are looking forward to help reduce the vulnerability of small businesses and low-income households in these regions and to contribute to achieving the G7 goal to insure 400 million vulnerable people."