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Rajab Hussain
Roohi Ahmad


It seems that there are significant connections between microfinance and climate change. The proliferation of small enterprises is having an effect on environmental circumstances and climate change, as well as creating more business prospects for them through microfinancing operations. The escalating commercial operations necessitate a greater consumption of water and power to carry out production and manufacturing tasks. Growing commercial activity is another factor contributing to the global warming that is occurring. However, the release of greenhouse gases is also a contributing factor to harsh weather patterns and increased temperatures. In addition to having an effect on the agricultural sector of the economy, excessive water consumption and glacier melting are also contributing to sea level rise, which poses a hazard to both individuals and farmers. Floods are becoming more likely in both rural and urban regions due to increasing sea levels and the excessive melting of glaciers brought on by global warming. As such, there is a direct correlation between the rise of small enterprises and the alteration in the climate. Small businesses thus take precautions to reduce their influence on the climate, but the growing number of commercial operations can still have a negative impact on the global climate. The Hindu-Kush Himalayan region's population is especially susceptible to climate change-related food insecurity due to inadequate infrastructure, restricted access to international markets, geographic remoteness, low productivity, and susceptibility to hazards (IPCC, 2019). Due to extended droughts and more frequent floods, farmers in this area are experiencing lower agricultural yields and a rise in food insecurity (Hussain et al. 2016; Manzoor et al. 2013). These days, climate change amplifies natural disasters including drought, forest fires, floods, and landslides. The unsustainable levels of poverty and opportunity inequality in Pakistan will be significantly worsened by changes in monsoon patterns, an increase in hydropower projects, and ill-planned rural road projects. Policymakers must take immediate action to adapt to and mitigate the effects of climate change at the household and micro business levels. If policy limits money, microfinance can be a key player in promoting such best practices. By offering loans and other financial services, microfinance assists rural residents in creating assets, diversifying their sources of income, and managing risks. By expanding these activities through policy and community level initiatives, there is a great chance to benefit from financial innovations including risk insurance, microfinance, conditional cash transfer programs, and targeted subsidies. Mitigation and adaptation strategies, however, are insufficient to stop the negative effects of climate change; loss and damage (L&D) measures are becoming more essential and necessary. A comprehensive multi-level governance is therefore required. Concrete implementation of the Warsaw International Mechanism for Loss and Damage linked with Climate Change Impacts (2013) necessitates the backing of state policies and mechanisms. We demand the implementation of a top-down as well as a bottom-up strategy to address L&D in Pakistan in a more thorough manner, drawing on the example of Bangladesh. This policy paper aims to persuade policy makers to act swiftly in order to develop and execute policies that effectively address the effects of climate change in order to promote social and economic advancement.

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How to Cite
Hussain , R., & Ahmad , R. (2024). NEXUS BETWEEN MICROFINANCE AND CLIMATE CHANGE IN PAKISTAN. International Research Journal of Social Sciences and Humanities, 3(1), 486–514. Retrieved from