Suva, Fiji - The Asian Development Bank (ADB), the UN Capital Development Fund (UNCDF), and the UN Development Programme (UNDP) have launched an initiative that will help to create an insurance market for small, and medium-sized enterprises (MSMEs) in Fiji that are increasingly threatened by extreme weather driven by climate change.

Supported by $950,000 in technical assistance from the Asia-Pacific Climate Finance Fund (ACliFF), the initiative will research the insurance landscape for small businesses in Fiji, and develop and test pilot products, working with local insurance providers. This initiative builds on the work of the Pacific Insurance and Climate Adaptation Programme, which provides parametric insurance to vulnerable communities in the Pacific.

Parametric insurance is a form of index-based insurance that pays out when pre-agreed trigger conditions are met, such as rainfall thresholds or wind speeds. With simple rules and no need to prove losses, parametric insurance can help to insulate vulnerable communities from climate hazards by providing fast, pre-defined payouts.

MSMEs account for more than 80 percent of all Fijian businesses and employ more than a quarter of the workforce, according to the Fiji Bureau of Statistics. But the sector remains highly vulnerable to extreme weather driven by climate change, with limited access to tailored insurance solutions that can help them recover and build resilience.

“With small businesses making up such a significant proportion of the Fijian economy and workforce, it is essential to protect this sector,” said ADB’s Pacific Subregional Office Regional Director, Aaron Batten.

“This initiative will help to lay the foundation for a domestic insurance market specifically designed to meet the needs of these businesses and support climate resilience across critical sectors of the Fijian economy.”

ADB’s Country Partnership Strategy for Fiji for 2024-2028 supports the country’s resilience to economic and climate-related shocks, which aligns with the objectives of PICAP to build the financial preparedness of low-income households against natural hazards. PICAP is jointly implemented by UNCDF, UNDP and the UN University’s Institute for Environment and Human Security.

“UNCDF is dedicated to ensuring finance reaches those who need it most, particularly MSMEs, that drive inclusive economic growth. By harnessing blended finance and strategic investments to mitigate risks in early-stage ventures, we are working to unlock public and private capital for underserved markets,” said UNCDF Executive Secretary Pradeep Kurukulasuriya.

Mr Kurukulasuriya continued: “This innovative approach empowers MSMEs in the world’s toughest economies to flourish, strengthen resilience, and foster sustainable development that uplifts communities and leaves no one behind.”

The UNDP Resident Representative for the Pacific Office in Fiji, Ms. Munkhtuya Altangerel, added: “UNDP is proud to partner in strengthening the resilience of MSMEs

“This initiative supports our broader efforts across the Pacific to promote risk-informed development, harness digital innovation, and accelerate progress on the Sustainable Development Goals. By empowering local businesses, we help communities adapt to climate change and build a more resilient, inclusive and sustainable future.”

ACliFF is a multi-donor trust fund established in April 2017. The fund seeks to support the development and implementation of financial risk management products that can help unlock capital for climate investments and improve resilience to the impact of climate change.

ADB is a leading multilateral development bank supporting inclusive, resilient, and sustainable growth across Asia and the Pacific. Working with its members and partners to solve complex challenges together, ADB harnesses innovative financial tools and strategic partnerships to transform lives, build quality infrastructure, and safeguard our planet. Founded in 1966, ADB is owned by 69 members—50 from the region.

For further information please contact: 

Sheldon Chanel, Communications Lead, UNCDF, UNDP Pacific Office in Fiji, sheldon.chanel@undp.org