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Micro-financing provides small loans and savings opportunities for low-income households, enabling them to invest in flood-resilient housing, diversify livelihoods, or recover more quickly after a disaster.
This is important because traditional banks often exclude poor or informal residents, leaving them with no safety net. Government-supported micro-finance programs can fill this gap while promoting economic inclusion.
How to Put This Into Practice
Partner with micro-finance institutions (MFIs) to target flood-prone communities.
Offer subsidized interest rates or partial loan guarantees.
Link micro-finance to resilience outcomes, such as improved housing or livelihood diversification.
Monitor repayment systems to prevent over-indebtedness.
Example
Bangladesh pioneered micro-financing for rural communities vulnerable to cyclones and floods. These programs enabled households to rebuild faster and invest in small businesses, reducing long-term vulnerability.