SPECIAL REPORT: Christoph Pausch on Why You Should Complete a (Simplified!) Application for the $112k European Microfinance Award 2019: Resilience to Climate Change

MicroCapital: Why did you choose “Strengthening Resilience to Climate Change” as the theme of the 2019 European Microfinance Award?

Christoph Christoph Pausch, e-MFP Pausch: Climate change is the biggest issue we face as a society today. At the mitigation level, action is slowly (too slowly) being taken to reduce global emissions. However, a sensible response must include adaptation too. How do we live – and more importantly, help the most vulnerable to survive – in a world with a very different climate than we’ve been used to?

We have chosen “Strengthening Resilience to Climate Change” as the theme of the Award this year because resilience to the consequences of climate change is critical for the groups who will be most affected by these consequences. These groups are largely financially excluded, and they overwhelmingly live in places that will be most affected by worsening flooding, drought, storms, erosion or pests. Climate change also disproportionately affects those who make their livelihoods from agriculture, forestry, livestock husbandry and fishing.

While this is an immense challenge, we recognize the vital role that the financial inclusion sector can play because much of the resilience we’re promoting can be facilitated by financial services. Well-designed initiatives can facilitate risk-reducing measures that help mitigate the catastrophic consequences of shocks; they demonstrate preparedness for future economic shocks; and they offer ways to smooth consumption without taking on unsustainable levels of debt or selling productive assets. We’re excited to receive what we hope will be a broad range of innovative responses to these great challenges.

MC: Is the focus only on insurance, or is there also room for providers of other services, such as savings or non-financial services?

CP: While we can’t predict what initiatives financial institutions and their partners will submit, yes, the range of responses that can increase resilience goes beyond insurance. The microinsurance sector is continually developing new crop, livestock and disaster insurance products tailored for vulnerable segments. We also would be pleased to see initiatives that cleverly promote savings or loan products for long-term financial planning, such as investing in assets, managing expenses or dealing with emergencies. All of these can build resilience to climate change. Remittance services also can help vulnerable households and communities transfer funds to purchase critical supplies, meet continuing obligations or otherwise mitigate the effects of a disaster driven by climate change. Finally, we’re hoping to receive applications that include non-financial products and services that complement relevant financial products. This could include capacity building, standard setting or technology that helps clients understand and forecast weather events. This is not an exhaustive list by any means.

MC: How have you made it easier to apply for this year’s award?

CP: The Award process has changed quite a bit this year, in part based on feedback from a survey we conducted last year. First, there will be two application rounds. A shorter, initial round was launched on March 13 and closes on April 9. Successful first-round applicants will be invited to submit a more extensive application in May. From that pool, up to 10 applicants will become semi-finalists, with three finalists invited to European Microfinance Week in Luxembourg, where we will announce the winner on November 21. In addition to increasing the efficiency of the evaluation process, the easier first-round process will encourage more organisations to apply. We believe this will lead to a higher quality field of applicants.

Separately, we have loosened the eligibility criteria, in that organizations no longer have to provide the financial products or services directly. This year, an organization can apply if it is partnering with a financial services provider, as long as the primary applicant plays an integral and ongoing operational role in the project. We expect this will bring in a broader range of software providers, hardware manufacturers, NGOs and other stakeholders that are partnering on innovative initiatives but may not be banks, MFIs or insurance companies, etc. All of this information – and much more – can be found in the Explanatory Note that is published on the Award website in English, French and Spanish.

MC: In addition to the prize money, what kinds of benefits have previous award winners reaped from their participation?

CP: Anecdotally, we hear from previous winners that the exposure has opened new doors to funding, partnerships and collaboration. Each year at the Award ceremony, a visit to the previous winner yields interesting information on what has changed over the year – including, of course, how the organization used the prize money. In recognition of this being the tenth edition of the Award, the European Microfinance Platform (e-MFP) is publishing interviews throughout 2019 with each of the previous winners. These interviews will cover exactly that question: how winning the Award translated into impact in the field. So stay tuned to the e-MFP blog for the other interviews in this series!

Christoph Pausch serves as Executive Secretary of e-MFP. The €100k European Microfinance Award is jointly organised by the Luxembourg Ministry of Foreign and European Affairs, e-MFP and the Inclusive Finance Network Luxembourg. Applications for the first round of the European Microfinance Award are due April 9. To apply, please visit http://www.european-microfinance-award.com.

This notice is part of a sponsored series on European Microfinance Week, which is held annually by e-MFP, a Luxembourg-based network with over 130 members. MicroCapital has been engaged to cover the event on-site since 2012.

Sources and Additional Resources

MicroCapital coverage of European Microfinance Week Since 2012
https://www.microcapital.org/category/european-microfinance-week/

European Microfinance Platform (e-MFP) information on European Microfinance Week
http://www.e-mfp.eu/microfinance-week-0

European Microfinance Award
http://www.european-microfinance-award.com