ALM UNDP

Summary:

Extreme El Niño flooding events occur on a regular basis in northern Peru, particularly in Piura. Even with advanced warning, poor households struggle to manage a risk as large as that posed by El Niño flooding; they lose their productive assets that defined their livelihoods, and as a result endure unrecoverable economic hardship. In partnership with GlobalAgRisk, UNDP is currently supporting a project to enhance the risk coping and adaptive capacity of the working poor as they face the consequences of El Niño-driven flooding.

This report documents progress toward designing and developing household financial products in the northern region of Peru. The products are meant to increase the ability of households to become resilient and to cope with the pain and suffering that accompany catastrophic flooding caused by extreme El Niño events. As part of the United Nations Development Programme (UNDP) Territorial Approach to Climate Change (TACC), the report specifically details El Niño Insurance for households in the Piura region and presents the reasoning for: how this insurance will efficiently speed adaptation and improve resilience to severe El Niño events; why regulators should encourage local microcredit institutions (cajas) to manage their credit risk using household insurance sales; and in turn, why cajas should provide incentives to households that manage their own risk using insurance.

The full report can be found here.