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Adaptive Finance to Support Post-Disaster Recovery

Adaptive financing is designed to adjust to the needs of specific locations in the wake of disasters.

 Adaptive Finance to Support Post-Disaster Recovery

In today’s rapidly changing world, there are many challenges facing organizations that help reconstruct communities after disasters. One major challenge is providing adequate financing options to survivors that are timely and appropriate. Such financing empowers survivors to rebuild their own homes, businesses and lives. 

Unfortunately, gaps remain between the financing needs of individuals and businesses after disasters and the availability of funding during recovery. And financing is often too slow or insufficiently scaled to support the most critical needs of individuals and businesses in the wake of disasters.

The private and public sector both have an opportunity to contribute to short- and long-term reconstruction efforts by providing financial products and services that are adapted to the needs of those affected by disasters. 

However, offering such products requires a paradigm shift in the way that companies design and offer financial products that can adapt to customer needs - as well as an understanding of the specific challenges presented by disaster recovery.

Changing conditions demand flexibility. Most product-development processes for individuals and small businesses create fixed products. For example, a mortgage is a product which a client can buy with generally set terms. However, if a client wants to change the fixed terms of their contract, they generally have to refinance. 

In contrast, adaptive financing offers flexible products that can adapt to changes in customer situations. This adaptability depends on flexible underlying processes that allow finance providers to make ongoing adjustments to products in response to changing client needs. This requires a redesigned product-development process. It also necessitates the management of a financial product as a service instead of a commodity.

This report documents the major challenges associated with designing adaptive products - and creating solutions that can reduce such barriers. It serves as a launch point for any organization beginning to think about creative financing solutions to disaster reconstruction. We hope it will inform and inspire such organizations to craft solutions that close the funding gap.

The Report

Adaptive Finance Report Cover








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People & Partners

Laura M. Hammett

Climate Change Adaptation and Urban Resilience Programming Specialist at UNDP
Master of Environmental Management 2017

Katy Mixter

Consultant at Boston Consulting Group
MBA 2017
Master of Environmental Management 2017

Bradford S. Gentry

F.K. Weyerhaeuser Professor in the Practice at Yale School of the Environment and Yale School of Management
Faculty Co-Director at Yale Center for Business and the Environment