Building Climate Resilience : Insights & Recommendations from a survey

Climate change is an undeniable reality with severe consequences, from extreme weather events to ocean warming and prolonged periods of drought. The scientific evidence unequivocally points to human activities as the primary driver of this rapid climate change. As we witness these changes unfolding, preparing for, recovering from, and adapting to the impacts becomes crucial to ensure a sustainable future for our communities.

Resilience has emerged as a key concept in addressing the challenges of climate change. It encompasses the ability of individuals, communities, and organizations to withstand and recover from climate-related shocks and stresses. Recognizing the need for a collective and coordinated effort, Pahal and Opportunity International (https://opportunity.org.au/) took a significant step toward climate resilience by conducting their first survey.

The survey aimed to understand the vulnerabilities of Pahal’s borrowers, who belong to some of the most economically at-risk segments of society. By gaining insights into their challenges and existing practices, Pahal can develop targeted interventions and initiatives to build individual, community, and organizational resilience. These insights can also be used to develop futuristic credit evaluation models.

Despite language barriers, the respondents participated eagerly, answering the questions enthusiastically and providing valuable insights across the 4Cs -

Human Capital:

• Diversification of income sources indicates the adaptive behaviour of households in response to economic challenges. This flexibility can contribute to their overall resilience.
• The shortage of milk during festive seasons in locations such as Atrolia, UP, highlights the economic motivations of cattle owners and the potential conflicts between traditional agricultural practices and market demands.

Natural Capital:

• Limited access to irrigation facilities underscores the vulnerability of farmers to water scarcity. The reliance on renting neighbouring tube wells suggests a need for improved irrigation infrastructure.
• Annual flooding and inadequate road construction in certain regions highlight the susceptibility of agricultural activities to extreme weather events and the importance of climate-resilient infrastructure.
• The variation in protective vegetation between Bihar and UP suggests different approaches to ecosystem-based adaptation strategies. Bihar’s diverse range of protective crops demonstrates the potential for enhancing climate resilience through agro-forestry practices.

Financial Capital:

• The lack of awareness and confusion between insurance and loans indicates the need for financial literacy programs tailored to the community’s specific needs. Addressing this knowledge gap can empower individuals to make informed financial decisions. This is very critical as, as per the Asian Development Bank, only 27%of adults and 24% of women in India meet the minimum level of financial literacy as defined by the RBI.
• The financial challenges faced during lean seasons and the allocation of savings towards loan repayments and education expenses highlight the
• Economic stressors experienced by respondents. Providing targeted financial support during these periods can enhance their resilience.
• Reluctance to sell productive assets during emergencies reflects the importance of farmland and livestock for sustenance and livelihoods. It emphasizes the need for alternative financial mechanisms and safety nets to avoid asset depletion and maintain long-term resilience.

Social Capital:

• Access to weather forecasts through smart-phones demonstrates the potential for leveraging technology to disseminate climate information and support farmers in making informed decisions.
• The reliance on neighbour’s choices for farming decisions highlights the influence of social networks and traditional knowledge in agricultural practices. This insight suggests the importance of community-based approaches to disseminating climate-related information and promoting sustainable farming practices.
• The gender disparity in roles and limited market-related knowledge among women underscore the importance of gender-inclusive interventions and empowering women with market-related information and skills.

Based on these insights, we see a huge potential to come up with targeted interventions like –

Customer Education and Awareness: The first step involves establishing awareness and facilitating education among the target audience. Given the potential difficulties in reaching out and communicating with these particular customers, a practical approach would entail employing audio-visual content that is easily accessible and relatable. This would enable us to educate borrowers on the importance of proficient climate risk management. These audio-visual materials would predominantly emphasize the four fundamental pillars of climate change: Mitigation, Resilience, Adaptation, and Transition.

Focusing on Income Diversification: A viable strategy involves developing additional products that specifically cater to alternate earning opportunities. Examples of such products include cattle funding, alongside the provision of insurance coverage, as well as funding and support for Skill Development courses.

Asset Protection/ Insurance: The need of the hour is to introduce more understandable, affordable, and accessible insurance products that safeguard assets, such as Livestock, Crops, Medi-claim, and Asset Protection. These products will provide a reliable safety net for vulnerable customers, enabling them to recover more swiftly from unforeseen circumstances.

Product Development: There exists substantial scope for developing innovative products, such as affordable housing loans, loans for durable roofs, house extensions and renovations, education financing, water and sanitation initiatives, loans for small and marginal farmers to procure high-quality inputs and farm equipment, as well as, loans for solar products.

Collaboration with Technology Partners: Forming meaningful partnerships with fin-tech, agri-tech, and health-tech companies is essential to expedite the delivery of financial services. This collaboration should encompass savings, remittances, credit facilities, pension schemes, agricultural advisory services, and primary healthcare services.

The climate resilience survey conducted in Bihar and Uttar Pradesh was our first towards building climate resilience amongst our borrowers. By implementing the above interventions, Pahal aims to empower vulnerable communities and pave the way for a sustainable future. We plan to make learning from our borrowers a constant endeavour and will keep tailoring our interventions to create a more resilient and prosperous society.