The UN Capital Development Fund has allocated US$50,000 to finance the execution of a project that will survey the risks and vulnerabilities MSMEs and Co-operatives in Fiji are subjected by natural disasters.
The Ministry of Trade, Co-operatives, Small and Medium Enterprises and Communications (MTCSMEC) in collaboration with the Office of the Prime Minister (OPM) and the UN Capital Development Fund (UNCDF) signed a grant financing agreement for a joint research project to understand the risks posed by extreme weather events to MSMEs and Co-operatives and the financial options available to them in the aftermath.
Kamikamica said based on the findings of the research, UNCDF will identify the type of CDRFI instruments that can be developed to protect MSMEs and co-operatives and project will have four distinctive phases: Research, Product Development, CDRFI product pilot testing and Assessment and Reporting post pilot.
“CDRFI refers to financial instruments, such as parametric insurance, that aim to improve the financial preparedness and resilience of individuals and societies against climate and natural hazards.”
Kamikamica said that this will be an exciting opportunity for MSMEs and Co-operatives to voice their opinions and ideas on the products to be designed to suit their environment and needs.
“Over the years, given our history of natural disasters, the parametric insurance will provide confidence and mitigate risks for our MSMEs and Co-operatives to establish throughout Fiji. Particularly, the parametric insurance will minimize, and address loss and damage suffered by MSMEs and Co-operatives.”
Kamikamica also mentioned that through this partnership, the Ministry will be able to foster entrepreneurial resilience by identifying the different risks associated with natural hazards that affect MSMEs and Co-operatives in various sectors and contribute to the development of tailor made CDRFI solutions.
Director, Inclusive Digital Economies, UNCDF Henri Dommel added they hope to learn from this experience and replicate in LDCs and SIDS with the aim to expand their CDRFI portfolio.
“We look forward to collaboratively working with the Government of Fiji on this project aimed at developing bespoke CDRFI solutions targeting MSMEs and cooperatives to build their financial preparedness and resilience against impacts of climate change and natural hazards.”