THE effects of climate change are threatening life and livelihoods. The scientific community has confirmed that the world is locked in a pattern of climate change because of the rise in global temperatures. Indeed the recent tragic events in Bududa and later Kabale and Butaleja are a manifestation o
THE effects of climate change are threatening life and livelihoods. The scientific community has confirmed that the world is locked in a pattern of climate change because of the rise in global temperatures. Indeed the recent tragic events in Bududa and later Kabale and Butaleja are a manifestation of changing climatic conditions.
A quick scan through Ugandaâ€™s rural areas portrays a rapid rate of deforestation to give way to farming and charcoal burning. These actions have destroyed the environmental cover giving way to disasters.
Although critics have lashed out at the Government for being ill-prepared when responding to disasters, the changing climatic conditions make it difficult to predict weather changes.
In December 2009, world leaders convened in Copenhagen to map out strategies for reducing carbon emissions. As the world grapples with strategies to combat the effects of climate change, one area that has great potential to support the existing interventions is microfinance.
In Uganda, over 80% of the rural population is engaged in agriculture either directly or indirectly. This has significant implications not only on climate change, but also on strategies to restrain its effects.
Smallholder farmers have a critical role to play by taking up actions in response to, or in anticipation of changing climate conditions in order to reduce adverse impacts or take advantage of any opportunities that may arise as a result of climate change. Efforts to mitigate the effects of climate change must put small-holder farmers at the forefront. Rural financing programmes, therefore, need to target these farmers if sustainable results are to be realised.
Rural finance has been part of the development toolbox for over 30 years. It involves the delivery of loans, savings, insurance and other financial services to the poor so they can engage in productive activities, helping them build assets, stabilise consumption and protect themselves against risk.
Innovative rural financial services can work towards building systems that reduce over dependency on agriculture for small-holder farmers and generation of employment for the youth.
Microloans such as those linked to the production, acquisition and use of affordable renewable energy resources such as energy saving stoves, biogas and solar equipment, can go a long way in enabling the rural poor to preserve the environment.
Use of energy saving stoves greatly cuts down the amount of firewood that a household uses. Savings and Credit Cooperative Societies can extend loans to their members at flexible repayment methods to enable them buy energy saving stoves.
The high rates of rural unemployment among the youth are pushing them into charcoal burning and brick laying. The effects of these activities are grave on the environment. Rural financing systems that finance asset acquisition can help the youth start and manage small production enterprises under cooperative arrangements.
Rural financing schemes can also target commercial forestry and increase tree-planting within the rural areas. Such financing can be extended to small-holder farmers to enable them purchase tree seedlings. This, in the long run, will help cover the gap of the already destroyed forests.
There is need to deliberately interest small-holder farmers into other commercial activities other than agriculture.
Over dependency on agriculture for livelihoods is the greatest threat to the environment. Farmers need to diversify into trade and other activities. The potential for rural finance towards mitigation of climate change is an option the Government should popularise.
The writer is a rural finance specialist
Rural financing can ease climate change effects