Within the next decade, an estimated 400 million of the world's extreme poor are expected to be living in fragile countries — and 75% of people facing acute food insecurity already are. As of 2025, 22 of the 30 countries most exposed to climate change were classified as fragile and conflict-affected by the World Bank; on the ND-GAIN index, 17 of the 25 most climate-vulnerable countries are FCS.

In this context, inclusive finance has to do more than expand access to credit; it must also help livelihoods survive the next shock. Fragile, conflict-affected economies are highly exposed and vulnerable to disaster risk yet hold the least fiscal space and the smallest share of risk financing to meet it. That dual challenge was the focus of a practitioner session at the Fragility Forum 2026 on June 10, which looked at how financial-sector tools can both expand access and protect livelihoods when shocks strike. The session brought together examples of CGAP’s work on building MSME markets in fragile settings and the World Bank’s  disaster risk finance and insurance (DRFI) instruments - bringing together practitioners working on practical solutions in a range of FCV-affected settings. Moderator Isaku Endo (Senior Financial Sector Specialist, World Bank) set the tone: in conflict-affected contexts, financial sector solutions must do at least two things at once - create the conditions for growth and build the resilience to protect those gains when shocks materialize.

Scene-setting: the seeds planted in good times offer resilience in hard ones

Will Cook (Senior Financial Sector Specialist, CGAP) framed the discussion around two ideas: that working in FCV demands constant adaptiveness as conditions shift, and that it pays to invest in institutions that can withstand crises. The seeds planted in good times, he stressed, offer resilience in hard ones. Sudan’s case illustrated the first point: as conditions changed rapidly, the engagement model had to shift with them - from direct engagement with the central bank toward humanitarian channels. Afghanistan illustrated the second: an apex microfinance institution set up in 2003 as a neutral civic body stayed when international microfinance providers and capital pulled back after 2021, recapitalizing microfinance providers from its own books and helping relaunch Sharia-compliant lending. Today there are nearly 70,000 active clients, 43% of whom are women - because a neutral, locally anchored institution, insulated from shifts in government and funding, was already in place when the crisis hit.

Project spotlight

Tatiana Skalon (Senior Financial Sector Specialist, World Bank) put the human cost plainly: when a drought or flood wipes out crops and livestock, borrowers default, lenders retreat, and the most vulnerable resort to negative coping. Disaster risk finance is not just about arranging funding ahead of a shock - it is about linking that money to delivery systems that get it out to people fast. She spoke about three projects. The DRIVE project delivers index-based livestock insurance and savings - including Sharia-compliant takaful - to pastoralists in Kenya, Ethiopia, Djibouti, and Somalia, reaching over 3.5 million people and paying out within five days on average. Burkina Faso’s Financial Inclusion Support Project and Pakistan’s Climate Risk Fund keep credit flowing after a shock. This kind of backstop matters because shocks can sharply reduce lending to the most vulnerable - in Pakistan, the 2022 floods cut microfinance sector growth from 19% to 2.4%.

The panel: building markets, channeling capital, reaching people

Jules Ntambu (CEO, Kolisa RDC) introduced Kolisa RDC, a locally anchored institution built around digital payments and financial sector development. He laid out the scale of DRC's financial inclusion challenge — private credit is just 11% of GDP, around 90% of transactions sit outside the formal sector, and agriculture employs 70% of the workforce but receives only 2–3% of lending. The constraint is rarely liquidity but the missing layers of long-term funding and early-stage equity, plus dormant pension and sovereign capital that needs blending with development finance. Building credit flow depends on a greater diversity of players offering instruments tailored to businesses at different stages.

Vivianne Infante (Director for Horn of Africa, British International Investment [BII]) explained why BII stopped treating Africa as a single market - investing in a fragile, recovering market like the DRC or Ethiopia is not the same as investing in Kenya or South Africa, and the firm had to develop tools suited to the frontier end of the spectrum. That is the purpose of the Africa Resilience Investment Accelerator (ARIA), a partnership through which BII identifies firms that are near "investability" and uses a dedicated pool of technical assistance to get them there. In the DRC that has meant a guarantee with Ecobank — under which BII covers half of any losses on SME lending — deliberately steered toward non-mining sectors such as food, agriculture, manufacturing and off-grid climate, to encourage the de-risking of SME lending.

Rhoda Rubaiza (Project Lead, ZEP-RE / DRIVE) described how financial instruments can protect jobs and livelihoods from the impacts of climate and disaster shocks. Through the DRIVE program, ZEP-RE delivers a package of financial services, including livestock insurance, to nomadic herders who are constantly on the move across remote, fragile areas. ZEP-RE cannot reach them directly, so it relies on aggregators — community-based organizations, UN agencies, NGOs, and national governments in Somalia and Kenya — for last-mile distribution. A Digital Inclusivity Platform underpins the operation, handling pastoralist registration, financial-literacy delivery, two-way communication, and the grievance/complaints system at a scale that would otherwise be impossible. Above all, the scheme runs on trust: agents are not outsiders, but people known within each community, often nominated by the local chief or community leaders.

Key takeaways:

• Build on enduring local institutions — neutral, third-party bodies that stay when governments change, and international funders withdraw.
• Design for the shock before it arrives — pre-arrange financing and invest in the operational readiness needed to deliver it quickly through  “money out” systems.
• Adapt financial instruments to local context, including Sharia-compliant structures that can facilitate financial inclusion in Muslim-majority settings.
• Consider regional solutions to achieve economies of scale. Pooling risk across countries helps diversify risk and achieve the scale that single-country insurance schemes cannot.
• Pair market creation with financial protection: inclusive finance in FCV works only when growth and resilience advance together so that the gains of development are not lost to recurrent crises.

Watch a recording of the session here.