Race to Resilience in action: Strengthening climate resilience in Senegal through digital agricultural finance

By Climate Champions | May 1, 2024

Partner: Scale for Resilience (YAPU Solutions)

Implementers: CAURIE Microfinance, GAWA Capital Haruma Fund

Country & Region: Senegal, Africa

SAA System: Finance

Beneficiaries / Impact: 77,000 people benefited with loans from which 78% are woman; $ 27 million loan portfolio

In Senegal, the impact of climate change is acutely felt across its vast agricultural landscapes, where smallholder farmers – many of whom are women –face increasing vulnerability due to erratic weather patterns. This challenge necessitates not only robust adaptation strategies but also accessible financial solutions that cater specifically to the needs of these communities. CAURIE Microfinance, in collaboration with Race to Resilience partner, YAPU Solutions and supported financially by GAWA Capital through the Huruma Fund, is pioneering a transformative approach to agricultural finance to enhance climate resilience among these critical population groups.

The journey of adaptation to climate change is complex and varied across different regions and crops. In Senegal, where agriculture employs over 70% of the rural population and contributes significantly to the national economy, the need for targeted and efficient adaptation measures is critical. This involves a nuanced understanding of local conditions, climate threats, and the specific needs of the agricultural sectors most affected.

In Senegal, the adverse effects of climate change are disproportionately borne by women and other vulnerable populations, particularly in rural areas where agriculture serves as the primary livelihood. Erratic rainfall patterns, increased temperatures, and frequent droughts have exacerbated challenges in water scarcity and food security, directly affecting the daily lives and economic stability of these groups.

Women, who constitute a significant portion of the agricultural workforce, face heightened risks as they are often responsible for gathering water, securing food, and sustaining family farms. The changing climate not only threatens their crops but also their roles within their communities and families, pushing them into a cycle of increased labor with diminishing returns.

Furthermore, these vulnerable communities often lack the resources to implement effective adaptation strategies independently. Limited access to land, financial services, and technology prevents them from employing advanced agricultural techniques that could mitigate the impacts of climate variability. This situation underscores the critical need for tailored financial solutions and educational programs that empower these groups to manage climate risks more effectively.

Established in 1996, CAURIE Microfinance has grown into a key institution within Senegal’s microfinance sector, with a significant focus on empowering women. It currently manages a loan portfolio of $27 million USD, serving 77,000 borrowers, of which 78% are women. Recognizing the urgent need for resilience in agriculture, CAURIE has been proactive in integrating digital tools to enhance its lending processes:

  1. Risk Management and Digital Integration: Implementing a gender-sensitive Climate Risk Management policy, CAURIE uses the YAPU platform to incorporate real-time climate risk assessments into their loan processes. This digital integration helps align loan approvals with the latest climate data, ensuring that financial resources are allocated to the most effective adaptation measures.
  2. Capacity Building for Sustainable Practices: Extensive training programs are set up for both staff and borrowers to heighten awareness and implementation of climate-smart agricultural practices. This educational outreach is critical in fostering a community well-versed in adaptation strategies.
  3. Data-Driven Agricultural Lending: By developing a referential data system, CAURIE enables loan officers to make informed decisions based on detailed, crop-specific economic data and sustainability factors. This approach is crucial in supporting agricultural practices that are both profitable and environmentally sustainable.

To date, CAURIE has disbursed 620 loans focusing on sustainable solutions like drip irrigation systems, organic fertilizers, and solar energy products, which are essential for promoting sustainable agriculture in the face of climate change. These efforts not only help mitigate the impact of environmental challenges but also support the economic stability of farming households.

Looking forward, CAURIE is committed to expanding its portfolio of adaptation and resilience loans. The future strategy includes enhancing automated reporting to better align with global sustainability goals and agendas, furthering the reach and impact of their financial products.

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Thumbnail: Wikimedia Commons

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