Of the estimated 123,000 businesses in Rwanda around 98% are micro, small and medium enterprises (MSMEs) and around 84% are informal (business that are not registered with a public authority body). Climate-related hazards pose a risk to the livelihoods of business owners, workers and to the economy at large. Climate extremes and disaster events can damage physical assets such as buildings and goods, or threaten infrastructure and services which are vital for the operation of businesses. For instance landslides can block transport routes, or floods can disrupt production processes.

Many obstacles restrict the resilience of small businesses, and adequate support structures to enhance resilience are lacking. Climate finance can be difficult to acquire, climate information (such as seasonal forecasts) can be inaccessible, and appropriate risk-sharing mechanisms are scarce. Collaboration between business may provide a mechanism to overcome these challenges and to build MSME resilience; both vertical collaboration of larger businesses with smaller suppliers and horizontal collaboration between similarly-sized business. Examples of vertical collaboration might include loans or efforts to strengthen local infrastructure, while horizontal forms might include saving schemes or cooperation to access information or finance. Such cases of collaboration between businesses can be seen in Rwanda.

This research, led by Adelphi and the Rwandan Institute for Policy Analysis and Research, investigated how cooperation between businesses in Rwanda has contributed to their climate resilience in the past and the potential for cooperation to increase resilience in the future. The project focussed on the potential for collaboration to reduce the costs incurred by business from increased climate related impacts in urban areas of Rwanda. Research findings on success factors and options for enhancing cooperation informed recommendations for improving the regulatory framework within which businesses operate. In the long term, the project has helped to increase resilience of business through enhanced business collaboration in Rwanda, and further afield.

The project built on and complemented CDKN’s support for the design and operationalisation of Rwanda’s National Climate and Environment Fund (FONERWA) and earlier support to the development of Rwanda’s Green Growth and Climate Resilience Strategy.

Resources

The project has produced evidence on the economic impact of flooding on small and medium businesses in Kigali, and on the actions taken, collaboration and attitudes among small businesses in Kigali for manage flood risk. Published academic journals on these findings are forthcoming.

The final report is available here. In addition, the project produced a flyer on protecting small businesses from floods, and a briefing note summarising the main findings and recommendations.

CDKN funding: £143,800