Unlocking Innovative Climate Financing Tools to Empower the Marine Small-Scale Fisheries Sector of Sri Lanka in a Climate-Changing Future

Purpose: The Marine Small-Scale Fisheries (MSSF) communities demand sustainable and innovative climate financing solutions as a highly vulnerable group to climate change. Hence, this study aims to mapthe existing climate finance landscape, assess the role of available climate financing instruments, identify the challenges MSSF communities face in accessing climate finance, and develop innovative climate financing tools tailored to the MSSF sector.
Research Method: The qualitative primary data were collected through a survey from purposively selected MSSF communities in Tangalle, Galle, and Negombo, as well as in Kalpitiya, Jaffna, and Trincomalee (384 respondents; 54 fishermen in each location and 20 fish processors in Galle, Negombo and Tangalle) and from expert consultations with 25 members, primarily in the fisheries and finance sectors. The climate finance landscape and the role of available financial instruments were descriptively analysed. Two-stage thematic analyses were applied: the first stage identified the prevailing challenges in accessing climate finance, and the second stage identified innovative climate f inancing solutions to address them.
Findings and Values: Government, private, and international/multilateral funds are the primary sources of climate financing, while the Ministry of Fisheries (MOF), multilateral organisations, public and private banks, NGOs, and informal moneylenders are the primary intermediaries. There are limited climate financing options, including insurance, grants, subsidies, financial aid, and formal and informal credit. The lack of locally governed, low-cost, flexible, inclusive and sustainable f inancial mechanisms is a key challenge identified. Overall, the study suggests six innovative climate-financing tools that provide the first context-specific models tailored to Sri Lanka’s MSSF sector: Index-based insurance schemes, welfare schemes, Agency banking models, Savings clubs, Micro group loans, and Impact investment.