The increasing frequency of floods across Ghana is crippling small businesses, with many traders losing income and stock whenever the rains come. “When it floods in front of my shop, customers don’t show up,” laments Justine, a trader, echoing the struggles of countless entrepreneurs.

While Africa contributes the least to global carbon emissions – a mere 7% since the 19th century – it bears the brunt of climate change impacts. The International Rescue Committee (IRC) identifies Africa as home to seven of the ten countries most vulnerable to climate shocks, including Somalia, Chad, South Sudan, the Democratic Republic of Congo, and Nigeria.

These impacts extend beyond environmental concerns, posing a significant threat to economic stability. Food insecurity, rising poverty, and widening inequality are becoming commonplace. The critical question now is whether climate financing is effectively reaching African businesses to help them not just survive, but thrive.

Micro and small businesses (MSMEs) and farmers are particularly vulnerable, often lacking the financial safety nets to withstand climate-related disasters. Recognizing this, Advans, a leading microfinance group in Africa, has launched a climate strategy aimed at building resilience within these communities.

Ghana has experienced over 27 major floods in the last three decades, with Accra accounting for 15 of those events. Alarmingly, seven out of ten Ghanaians do not have insurance, and 42% are excluded from basic financial services, leaving them exposed to devastating losses. Advans’ research indicates that approximately 25% of borrowers in Ghana face significant flood risk, according to their work with Horus Development Finance.

Advans’ strategy focuses on four key pillars. Firstly, they are raising climate awareness among their staff, training over 700 employees through workshops like Climate Fresk and deploying online modules. Secondly, they are meticulously evaluating the impact of climate change on their portfolio, identifying specific hazards and assessing client vulnerability.

The third pillar involves building resilience through awareness and education. Advans Ghana, for instance, distributes flood mitigation advice and sends alerts via mobile and social media, reaching nearly 20,000 users. Finally, Advans is adapting its products and services to better support clients. In Côte d’Ivoire, they’ve piloted index and yield insurance for cocoa farmers, covering over 2,300 producers.

In Ghana, Advans is currently piloting a new insurance and loan package designed to help businesses recover after extreme weather events. This package, available to clients with a good repayment history, includes coverage for losses, a grace period, a preferential interest rate, and flexible repayment terms.

“59% of farmers in Tunisia reported they were better prepared for a climate shock thanks to Advans loans,” a 2024 study by 60 Decibels with 280 farmers revealed, demonstrating the positive impact of financial inclusion. Advans aims to expand these initiatives, recognizing that adaptability is paramount for success in today’s African economy.

The organisation’s Deputy CEO, Grégoire Danel Fedou, emphasizes that financial inclusion is a powerful tool for driving sustainable change and equipping African businesses with the resilience they need to navigate the challenges of a changing climate.

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