Publications

Across the globe, extreme events are hitting faster, harder, and more frequently, while the impacts are often compounding (WEF 2024). Inflation, mounting debt crises, geopolitical conflict, climate change, trade tensions, demographic shifts, increasing cyber risks, and global pandemics are among the many risks now unfolding simultaneously—and with growing intensity. These risks are also becoming more intertwined, exacerbating and compounding vulnerabilities, particularly for low-income populations and micro and small enterprises (MSEs). In the face of escalating risks, resilience for the most vulnerable is crucial. Self-employed individuals and MSEs form the backbone of most emerging market economies, particularly in informal sectors such as smallholder agriculture and small-scale trade that are highly at risk from crises and shocks. In many regions, including Eastern, Central, and Western Africa and South Asia, MSEs and self-employed individuals account for over 90 percent of jobs (ILO 2023). 

This paper outlines why inclusive finance is an indispensable component of effective societal resilience and how funders, policymakers, financial institutions, and other development stakeholders can leverage it to extend the reach, speed, and impact of their work. In doing so, it offers a practical path to connect global resilience goals with the people and businesses most at risk, thereby fostering true societal resilience.

This paper has been produced by CGAP.