Financial Inclusion, Financial Resilience, and Climate Change Resilience

Abstract

The Sustainable Development Goal (SDG-1) aims to “end poverty everywhere” by strengthening people’s resilience, reducing climate-related vulnerabilities and other socioeconomic shocks, and providing access to essential services, including financial inclusion. This chapter shows how financial inclusion, financial resilience, and climate change resilience are linked. The term “resilience” describes the adaptability of individuals, communities, and societies as a whole. “Financial inclusion” explains access to appropriate financial products and services for the public, while “financial resilience” describes the ability to meet urgent financial needs. Additionally, “climate change resilience” is a state in which an individual can successfully adapt despite environmental disturbances, stress, or adversity. This chapter draws a regulatory conceptual framework in understanding the nexus between financial inclusion, financial resilience, and climate change resilience. Existing literature confirms that financially integrated individuals are more financially resilient than those who are excluded. The findings of the extensive literature review also confirm that climate change resilience can be achieved through financial inclusion and financial resilience. Moreover, climate change resilience could be an inclusive solution against climatic and non-climatic stressors. Drawing examples from South Asian countries, we conclude that the inclusion of financial services enhances the resilience against the adverse effects of climate change. This study suggests integrated approaches to the management of risks related to climate extremes and disasters.