FinEquity Blog

How SEWA is Building Collective Agency and Mitigating Risk for 3 Million Women in India

A soman bends over a water source on the ground in India.

This blog is part of a series highlighting efforts from the FinEquity community to increase climate resilience for women through a mix of financial services and non-financial interventions.1  

Formed in 1972, the Self-Employed Women’s Association (SEWA) is India’s largest central trade union of women workers in the informal economy with nearly three million members. Its primary goals are full employment and self-reliance. 

A 2021 mapping of India’s climate vulnerability concluded that 80% of Indians are vulnerable to extreme climate disasters. SEWA surveyed 600 of its members from different trades and it was revealed that 90% of members experienced livelihoods loss by 30-50%, as they face disrupted workdays, rising expenses, and loss of goods and customers. Additionally, over 90% of members reported severe health issues, including heat-related illnesses, dehydration, UTIs, and mental distress. Extreme heat also disrupts food security, education, energy access, forcing marginalized women to choose between enduring harsh conditions or migrating, often at great personal risk. These cascading impacts worsen malnutrition, hinder children's education, and amplify gender vulnerabilities, deepening inequality.

On its 50th anniversary in 2022, SEWA launched the “Swachh Akash” (Clean Skies) campaign. The campaign is a multi-prong strategy that uses financial and non-financial tools to help members address the impacts of climate shocks and become builders of a new economy. There are three main interventions: a contingency fund, heat wave insurance, and complimentary non-financial services.

 Livelihood Recovery and Resilience Fund (LRRF) 

Every time the members face a shock, they ask for work. Therefore, at SEWA, we believe in turning adversity into opportunity. The SEWA members have an initiative to set up a fund that would help women workers to get back on their feet. Government aid and relief after disasters take a long time to trickle down to the people, who in the meantime are compelled to go to exploitative money lenders to survive. This makes them even more economically vulnerable.  

The Livelihood Recovery and Resilience Fund is meant to reduce the vulnerability of informal sector workers, who can access a loan within 14 days. This way, the members are able to stabilize their livelihood until relief money is disbursed, or their insurance claim is settled. Then they can repay the loan.  

The fund plays a pivotal role in bringing members into the mainstream economy as well as mitigating the impact of climate disasters, economic crises, and ever-changing market- and macro-economic landscape. The LRRF creates linkages between members and the formal financial system by supporting lender programs with risk mitigation using blended finance mechanisms like credit guarantees, first loss default guarantees, interest subventions, and others.

The LRRF also serves as a contingency fund that provides immediate assistance to members during disasters to ensure that they have immediate access to funds to survive the event and eventually restarts their livelihood. The fund brings key stakeholders such as financial service providers, private and public entities, and sector-specific experts together to build resilience of SEWA sisters to face any economic distress caused either by climate shocks or market shocks. For example, the fund supported 216 members in 2022 through interest-free advances for members affected by unseasonal rainfall in Gujarat. As of 2024, 99% of these advances have been repaid. SEWA has already supported the LRRF with one million USD and plans to scale up to 12 million USD in a second phase. SEWA will also work with the LRRF to explore more blended financing models to address both the risk and the immediate needs of members following a climate event.  

Extreme heatwave insurance

SEWA co-developed an insurance product to improve the financial resilience of its members in the face of extreme heat. The innovative parametric insurance product was designed to help marginal women workers partially recover income lost due to climate events. The program covered 21,000 SEWA members across 5 districts of Gujarat in 2023 and was scaled up to 50,000 members and 22 districts across Gujarat, Rajasthan, and Maharashtra in 2024. The program covers farmers and animal husbandry, salt pan workers, waste recyclers, head loaders, street vendors, ship breakers, construction workers, and home-based workers.  

In 2023, the product was co-developed with Blue Marble and the Arsht-Rock Foundation and the insurance coverage was from May 5th to June 30th. The insurance product did not pay out in 2023. Additionally, the program included the procurement and distribution of various wrap-around climate adaptation interventions to protect women workers from heat effects and mitigate the livelihood and health impact of extreme heat. All 21,000 women enrolled in the pilot were provided one of the four intervention – solar lights, insulated water jugs, tarpaulin sheets, or umbrellas.  

In 2024, the product coverage is from 9th April 2024 to 31st March 2025. The insurance was designed such that the policy automatically paid out when temperatures exceeded a predetermined threshold (ranging between 41.6°C to 46.1°C) for a minimum of two consecutive days, thus partially compensating women for their losses. This was done in collaboration with Swiss Re and Climate Resilience for All (CRA). The trigger temperatures varied by district to account for the historical temperature variations among the districts. Additionally, one-time direct cash assistance was given to members at lower temperature thresholds of 40°C. This cash assistance provided women with a supplement for lost income during periods of high, but less severe, temperatures that can still harm their health and livelihoods. This year, extreme temperatures resulted in the direct cash assistance getting triggered for all 50,000 members across 22 districts as well as the insurance getting triggered in for 46,339 members in 17 out of the 22 districts. Consequently, members received direct cash assistance of USD 240,096 and insurance payouts worth USD 350,859. Including both the cash and insurance layers, the average product payout was USD 11.82, with members in Dungarpur receiving the highest amount of USD 19.8 per member.

SEWA's parametric insurance pilot has revealed key insights for effective implementation.

  • First, low-income communities need initial incentives such as premium subsidies, cash support, or access to climate adaptation tools to appreciate the value of insurance.  
  • Second, limited awareness about insurance, especially parametric climate insurance, calls for building capacity at both institutional and individual levels, with CSOs, CBOs, and NGOs playing a pivotal role.  
  • Third, parametric insurance should be designed to cover multiple climate risks, including excessive rainfall and cyclones, alongside heatwaves.  
  • Fourth, the product should incorporate diverse parameters like humidity and nighttime temperatures for greater accuracy.
  • Fifth, combining insurance with contingency loans post-disaster, index-linked loans, commitment savings, and micro-pension schemes can aid immediate recovery and bolster long-term resilience.  
  • Sixth, insuring SMEs and SHGs as group policyholders can expedite product scaling, making coverage more affordable and comprehensive.  
  • Seventh, introducing cross-subsidization and risk-sharing mechanisms—such as premium rebates and credits for claim-free years—by insurers and governments can enhance affordability and uptake.  
  • Eighth, a forecast-based payout model, which disburses funds before climate shocks occur, can significantly influence behavior change. This pre-emptive approach ensures that beneficiaries prioritize safety and health, reducing the need to work under hazardous conditions during extreme heat.
  • Finally, climate insurance initiatives should also focus on creating alternative livelihoods for informal sector women. Training them as insurance agents to sell affordable climate micro-insurance can generate income and expand coverage. 

In conclusion, while climate insurance is crucial for building resilience and providing financial protection against climate shocks, it cannot function effectively in isolation. For long-term sustainability, insurance must be integrated with complementary financial and non-financial services, such as heat-health campaigns, early warning systems, innovative savings and loan products, and access to climate adaptation tools. Without such a comprehensive approach, generating demand for insurance in low-income communities remains a significant challenge.

You can view this CGAP video to learn more through the story of building women’s climate resilience from Bhavnaben, a SEWA client in India. 

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