Abstract
Financial exclusion is not a mere symptom of poverty but a significant driver of insecurity. This paper presents a gender responsive analysis of the interconnectedness between the crises of financial exclusion, climate vulnerability and insecurity in conflict-affected states of the Sahel region encompassing Niger, Mali, Burkina Faso, Chad, Nigeria and Senegal.
While just and resilient transition to sustainability requires the alignment of the financial markets with environmental and social goals, climate finance policies fail to reach most vulnerable populations, especially women and girls who are disproportionately impacted by climate change, thereby exacerbating rather than mitigating systemic fragility in the region. This paper aims to critically analyse the disconnect policy-practice, where international climate finance is found to be both inadequate and structured around debts rather than grants.
This paper employs a mixed-methods approach. The qualitative analysis involves a systemic review of relevant secondary sources including academic literature, NGO reports, policy briefs and news reports to establish the causal linkages between climate impacts, gendered vulnerabilities and evolving security dynamics while the quantitative analysis will leverage the World Bank’s Global Findex Database indicating financial inclusion, for the purpose of quantifying the gender gap in financial account ownership and the use of digital financial services across the countries under this study. The Notre Dame Global Adaptation Initiative Index (ND-GAIN) will be utilized to map areas of high climate vulnerability against low financial inclusion, ACLED data will be utilised to correlate financial exclusion with the count of incidence and intensity of recorded conflict events in the region.
This paper aims to contribute to the theme of Inclusive Green Finance as it provides empirical evidence of current policies and proposes a new framework for gender responsive climate finance.
Keywords: Gender, Climate Finance, Financial Exclusion, Just Transition, Human Insecurity, Sahel Region.
Introduction
The Sahel region stands at a critical juncture of extreme crises of climate vulnerability, recurring socio-economic fragility and insecurity induced by the activities of violent extremist groups in the region (Cepero et al, 2021). The Intergovernmental Panel on Climate Change (IPCC) has identified the region as a global hotspot, facing temperatures that are rising 1.5 times faster than the global average and experiencing increasingly erratic rainfall patterns (IPCC, 2014). In these recent years, climate instability has directly threatened the region’s agrarian and pastoralist livelihoods, which has amplified existing socio-economic vulnerabilities such as poverty and further escalated the unending cycle of displacement and conflict in the troubled region (Cepero et al, 2021).
However, this region is now one of the poorest and most environmentally degraded in the world as a result of these existing vulnerabilities, with over 40% of the population living below the poverty line (Alliance Sahel, 2025a). This ecological disruption makes it extremely difficult for households to cope with the recurrent shocks, leading to poverty persistence and heightened risks of instability.
Climate change in the Sahel operates as a threat multiplier and not a direct cause of conflict. As a threat multiplier, this refers to how environmental stress can amplify the existing fragility of the troubled region. Some research has identified it as a factor that exacerbates the underlying societal issues surrounding the everyday livelihood of the people (Crawford, 2015), these issues include livelihood degradation, mass displacement and resource scarcity. The Sahel region relies largely on agriculture and pastoralism, over 90% of the population depend on rain-fed agriculture and pastoralism for their livelihood especially in areas affected by insecurity (Alliance Sahel, 2025a). The widespread degradation of farmland and the excessive shrinking of water bodies due to the extreme heat and prolonged droughts have a strong effect on local economies (Alliance Sahel, 2025b).
However, these conditions enable the recruitment of armed groups in the region with women and girls sometimes voluntarily join these groups and in turn being exploited as a result of inter-communal grievances thereby fueling broader insecurity in the troubled region (ICG, 2016). Moving beyond the idea of “Climate Wars” (De Sherbinin et al, 2015) this paper will explore how environmental stress unravels social and economic problems and makes underserved communities more susceptible to exploitation and conflict.
In the Sahel region according to existing records, women and girls bear the heaviest burden of both climate and conflict crisis (OECD, 2020). The struggle for diminishing resources, such as water and food, has a cascading effect on their lives. Due to erratic rainfall and prolonged droughts, many water sources especially in deserted areas of Niger, Nigeria and Mali many water sources dry up, forcing women and girls to travel longer distances to access clean water for daily use (Itriago, 2025). This extended travel time increases their physical and temporal burdens, exposing them to a heightened risk of harassment and gender-based violence (Desai and Mandal, 2021). In addition, time spent in search of such resources, and their lack thereof can also jeopardize the educational attainment prospects of girls due to poor school attendance. This could potentially contribute to their limited involvement in other creative and productive activities, thereby limiting their human capital and future economic resilience.
This cycle therefore reveals how environmental issues like drought can directly affect security and human rights crisis with a specific and gendered victimology. Notably, inadequate access to clean water makes managing menstrual hygiene quite difficult for women and girls alike (WHO, 2014). It further leads to exclusion from societal activities and educational environments. The gendered impacts of this phenomenon cannot be over-emphasized because they carry weighty social consequences yet have profound economic implications that limit adaptive capacity further enhancing a cycle of unending vulnerabilities.
However, to ground this analysis, this paper leverages existing data that records vulnerability levels of the troubled region and its population to illustrate the scale at which these challenges have affected the Sahel region especially women and girls in contrast to the male population. The ND-GAIN Index, which summarizes a country’s vulnerability to climate change and its readiness to improve resilience, reveals that all Sahelian countries rank among the 20% most vulnerable globally (ND GAIN, 2023). This paper will further discuss and utilise vulnerability scale mapping, a method that integrates climatic, biophysical and socioeconomic data to identify hotspots, that is the country with the highest vulnerability thereby informing targeted adaptation strategies (De Sherbinin et al, 2015). This approach helps to change the course of discussion from mere general observation to a more detailed and data driven claim about specific and acute vulnerability of the Sahel region.
Additionally, this paper presents the idea of financial exclusion as a long-standing structural barrier to development. It is currently a critical and overlooked catalyst of insecurity in the troubled Sahel region especially in Niger, Burkina Faso, Nigeria, Mali and Senegal, all of which are threatened by climate change. This paper further argues that a gender-responsive approach is essential because the financial and physical burdens of climate change and conflict are disproportionately borne by women and girls.
This paper contributes to the theme of inclusive green finance by providing empirical evidence of how debt-based climate finance undermines equity and resilience. It also critically analyzes how financial exclusion serves as a catalyst of human insecurity in the Sahel through the lens of climate finance policies, through a human security framework lens, it underscores the need to move beyond state-centric approaches while focusing on the well-being of individuals and communities, it further examines how the predominance of debt-based climate finance exacerbates insecurity by undermining adaptive capacity, entrenching inequalities and fueling conflicts. The study through its key findings proposes a framework for gender-responsive climate finance that prioritizes grants over loans, how investments in digital finance tools, strengthens adaptive social protective systems and incorporates women’s voices into policy design. This approach is not only a matter of equity but essential for building durable peace and resilience in the Sahel region.
This paper is divided into eight parts. First, is the introduction, followed by the conceptual clarifications that explains the key concept of climate finance, inclusive Green Finance, and Just transitions. This is then accompanied by the next part which is the literature review that identify the existing gaps in the study of climate finance and gender vulnerabilities. The theoretical framework leverages the human security framework to explain the linkages between financial exclusion and human insecurity. Following this is the methodology section that explains the methods utilised for this research and the limitations of the study. The sixth part focuses on the discussion. This section elaborates on how financial exclusion serves as a catalyst of human insecurity while highlighting the shortcomings of climate finance policies. The seventh part draws attention to the implications for policy reforms based on the key findings of this study and finally, the study ends with a conclusion.
Through the critical examination of the shortcomings of climate finance policies with a gender-responsive financial inclusion lens, this research contributes to the literature by providing a more nuanced understanding of what a just and resilient transition truly requires. It goes beyond the traditional focus on macroeconomic instability to highlight how a lack of access to fundamental financial tools at the household and community level directly undermines adaptive capacity and, in turn, fuels social and security crises.
Conceptual Clarifications
Climate Finance
According to Wong (2016), Climate finance is generally known as the financial flows mobilised by industrialised countries into developing countries to support climate change adaptation and mitigation. Climate funds differ based on needs and location, broadly the concept refers to financial resources disbursed from different levels either local or International, transnational public, private or alternative sources intended to support or address the issues of climate change (Wong 2016).
The concept of climate finance is central to the 2015 Paris Agreement. This agreement outlines the commitment of international institutions and developed countries towards providing financial resources to assist them in implementing climate objectives (UNFCC, 2021). In the Sahel region, for instance climate finance serves two primary interconnected functions which includes mitigation, that is, actions aimed at reducing greenhouse gas emissions (GHS) to slow the pace of global warming; and adaptation, which include efforts toward enhancing the resilience of infrastructure, communities, economies and ecosystems, thereby enabling them to adjust both the current and predicted adverse effect of a changing climate environment.
It is important to note that climate finance in recent years have become politicised due to the differences and tensions between developed and developing countries, as most adaptation funds are being disbursed as concessional loans rather than grants, which in turn leads to budget reduction and reduced welfarism in less developed countries in an attempt to meet up with repayment of these loans. The reduction in social expenditure, in turn have negative impacts on women which increases gender inequity.
However, the adequacy and composition of climate finance as loans or grants, especially in its delivery for adaptation in troubled states of the Sahel region, forms the main critique of this paper.
Inclusive Green Finance
The concept of Inclusive Green Finance (IGF) emerged as an approach towards financial inclusion with green finance to help vulnerable populations to adapt and mitigate climate change shocks within their region and lower the impacts of the shocks while fostering a low-carbon economy (Alliance for financial Inclusion, 2022).
This approach to sustainable development was established to bridge the climate poverty nexus in countries affected. The policy of green finance empowers disadvantaged groups such as low-income households and micro, small and medium scale enterprises to access green financial services, such as climate-responsive insurance and green credits, which helps them manage climate risks, access sustainable technologies, and contribute to economic development and social well-being. It is an emerging and prioritised policy approach for most countries, Papau New Guinea was the first country to adopt the policy in 2023, followed by other countries including Egypt, Fiji and Bangladesh (Novak, 2025).
Inclusive Green Finance is still an emerging concept in the Sahel region that is yet to be fully adopted or pursued despite the fact that it possess significant potentials to drive sustainable development and Just transitions, although studies have found that through initiatives such as the Great Green Wall (GGW), national strategies including supporting the Alliance for Financial Inclusive Network (AFI) some countries have benefitted from what the framework has to offer but full adoption remains largely elusive and policies that fully support the integration of this framework in the Sahel region remain yet to be implemented.
Just Transitions
The concept of Just transitions first emerged in the 1970s as a labour-oriented concept (Wang, 2021), over the years the concept has broadened and found a foothold in the discourse of climate change, as it has been recognized internationally under the Paris Agreement of 2015. The concept became relevant in the scope of climate change because the impact of climate change on most populations is uneven and so are the efforts geared towards mitigation of climate change such as adopting renewable energy and closing of fossil fuel plants. The concept utilises “just” distribution to help combat this inequality to bring about fairer outcomes as the world transitions to net zero carbon emissions (LSE, 2024).
The International Labour Organization (ILO) defines the concept as greening the economy in a way that is as fair and inclusive as possible to everyone concerned, creating decent work opportunities and leaving no one behind (UNDP, 2022). Just transition has four pillars upon which it impacts climate change and green economies in countries where it is being implemented which includes: support for vulnerable communities by providing green jobs and skills, compensation and social protection of affected populations, economic diversification and regeneration to mitigate the socio-economic impacts of green transition.
The concept posits that no one should be left behind in the transition towards a low-carbon economy thereby ensuring that environmental policies do not disproportionately harm workers or communities. Just transition prioritizes adaptation investments and ensures that interventions and climate finance reaches the most vulnerable populations such as small holder farmers, women, micro, small and medium enterprises (MSMEs) and nomads who often lack access to credit and services to build financial resilience which is very important for fostering peace and reducing susceptibility to insecurity and exploitation.
Literature Review- Climate Finance and Gender Exclusion
The Paris Agreement and subsequent climate finance frameworks committed to mobilizing $100 billion annually to support climate mitigation and adaptation in developing countries (UNFCCC, 2015). However, empirical studies highlight persistent shortcomings in delivery, with flows often falling short of pledges (Roberts & Weikmans, 2017). Moreover, climate finance is mostly channeled towards mitigation projects in the middle-income countries, while adaptation funding is essentially for the Sahel yet it remains limited (Pauw et al, 2016).
Various debt-based instruments dominate the climate finance flows with concessional loans often outpacing grants (OECD,2020). Loans may be considered appropriate for some contexts in fragile states with limited fiscal capacity, these on the other hand exacerbate debt burdens, constrain policy autonomy and heighten economic insecurity (Carter et al, 2021). This structure undermines the equity principles of climate justice.
Most scholars highlight that financial exclusion intersects with climate vulnerability by limiting households’ ability to invest in climate-resilient livelihoods, diversify income, or access insurance against climate shocks (Demirguc-Kunt et al, 2021). Mostly in these local communities’ exclusion from finance influences food insecurity and societal instability. While financial exclusion remains pervasive in the Sahel region, limited access to credit, savings, and insurance constrains adaptive capacity and reinforces the cycles of vulnerability.
Gender dimensions of financial exclusion are well-documented. Women face legal, cultural, and institutional barriers to financial access, including lack of collateral, discriminatory inheritance laws, and exclusion from decision-making (UN Women, 2020). Climate change amplifies these vulnerabilities, as women are often responsible for food and water provision, making them disproportionately affected by droughts and resource scarcity (UN Women, 2020)
Despite global recognition of the need for gender-responsive climate finance, implementation has been weak. Studies indicate that women’s voices are often excluded from decision-making in climate finance allocation, resulting in policies that fail to address their specific needs (Schalatek and Nakhooda, 2013).
A growing body of literature links climate vulnerability to insecurity in fragile states for instance in the studies by Eboreime et al (2025) which argued that climate change pressures in the Sahel and Sudan region fuels conflict such as farmer-herder clashes and other resource scarcity related conflicts. Climate-induced livelihood degradation exacerbates grievances, fuels competition over scarce resources, and intensifies conflict (Hendrix and Salehyan, 2012). In the Sahel, climate shocks have been associated with increased recruitment into armed groups, farmer-herder clashes, and forced displacement (Raleigh and Kniveton, 2012).
However, it is noteworthy that existing studies are yet to adequately explore the nexus of financial exclusion and human insecurity. While climate finance is recognized as a tool for resilience, the reliance on loans and failure to reach vulnerable populations undermine its potential. This study seeks to fill this gap by applying a human security lens that emphasizes the intersection of financial systems, climate vulnerability, and patterns of insecurity, thereby offering a more holistic and gender-responsive understanding of how exclusion shapes risks in the Sahel. In doing so, it advances the literature by linking inclusive green finance with conflict prevention, demonstrating that equitable access to grants and digital finance tools can reduce insecurity while fostering resilience.
Theoretical Framework- The Human Security Framework
This study adopts the human security theoretical framework to analyse the nexus between financial exclusion, climate vulnerability, and human insecurity in the Sahel. Human security emerged as a paradigm that shifts focus from state-centric notions of security to the protection and empowerment of individuals (Rothschild, 1995; Gasper, 2005). Unlike traditional security, which emphasizes territorial integrity and military threats, human security encompasses multiple dimensions of well-being, including economic, environmental, health, food, and livelihood security (O’Brien & Leichenko, 2008).
Human security emphasizes two core freedoms: freedom from fear and freedom from want (Taylor, 2004). Freedom from fear addresses protection from violence and conflict, while freedom from want relates to access to resources, livelihoods, and opportunities. In the Sahel, financial exclusion undermines both freedoms. Without access to financial services, communities face reduced capacity to adapt to climate shocks, heightened poverty, and greater risk of conflict.
The human security framework is particularly relevant to climate finance because it highlights the insecurities that arise when adaptation and resilience strategies fail to reach vulnerable populations. By focusing on individuals rather than states, it exposes the inequities of debt-based finance models that deepen vulnerability rather than mitigate it. Scholars argue that human security represents a fusion of development and security, recognizing that sustainable peace depends on addressing structural drivers of vulnerability (Duffield, 2006).
It is important to note that gender dimensions are central to the human security lens. Women in the Sahel face structural barriers to financial inclusion, land ownership, and decision-making power. These barriers amplify their exposure to climate risks and limit their adaptive capacity. A gender-responsive human security analysis therefore provides critical insights into how climate finance policies must be restructured to promote equity and resilience.
Methodology
This paper adopts a mixed-method approach involving both qualitative and quantitative data collection to provide a comprehensive and insightful analysis on the subject matter, with a comparative analytical approach of six (6) countries in the Sahel region which includes Nigeria, Niger, Burkina Faso, Mali, Chad and Senegal. The choice of these countries is informed by climate change vulnerability and conflict, where climate finance funding and policies are entrenched in the region. Thematic analysis method is used to analyse data obtained from different sources and also reflects the reality of financial exclusion among women in the selected region and further unravel how it fuels insecurity.
The qualitative analysis involves a targeted review of relevant secondary sources including academic literature, NGO reports, policy briefs and news reports to establish the causal linkages between climate impacts, gendered vulnerabilities and evolving security dynamics. The foundation of the qualitative analysis is built on a review of academic papers and reports on climate vulnerability, and insecurity in the Sahel, as well as policy briefs and other related literature from organizations such as Oxfam, World Bank, International Monetary Fund (IMF), UN Women among others. These resources will help contextualize the data within recent events and policy outputs.
The quantitative analysis will leverage data from World Bank’s Global Findex Database indicating financial inclusion. It will be used to quantify the gender gap in financial account ownership and the use of digital financial services across the countries under this study, in the Sahel region. This data will serve as a primary source and provide on the ground insight to account ownership, digital payments, savings, and borrowing behaviours, with a specific focus on the disaggregation by gender and location. This data allows for the quantification of the gender gap and the tracking of the adoption of digital financial tools in the region. The Notre Dame Global Adaptation Initiative Index (ND-GAIN) will be utilized to measure and map areas of high climate change vulnerability and its readiness to improve resilience against financial exclusion. Data obtained from Armed Conflict Location and Event Data (ACLED) is used to quantify the level of human insecurity by tracking the count of armed attacks and fatalities in the regions under this study, this will establish tangible correlation between financial exclusion and insecurity.
Limitations of the Study
This study focuses on countries in the Sahel region due to their designation as a global hotspot for climate fragility and terrorism. In addition, these countries also have high rankings on the ND-GAIN climate vulnerability Index, and they have a persistent status of instability. The study period of the quantitative data is concentrated on 2021-2022 because this is the specific time frame of the last published financial inclusion data from the World bank Global Findex database for these affected Sahelian countries, it was collected and released during this period, with some countries surveyed in 2021 and others in 2022. While this ensures that the data is the most recent available for cross-country analysis of the region. It poses a limitation by preventing the analysis of the financial inclusion trends and policy impacts that have emerged since 2023.
However, this temporal constraint does not invalidate the study’s primary contribution, which aims at using its key findings to suggest a systemic policy framework for gender-responsive finance based on established vulnerabilities and proven program effectiveness. General limitations of the study include the inherent challenges of establishing direct causality between macro-level financial status and micro-level conflict incidence in highly complex security environments, requiring caution when interpreting correlations derived from aggregated indices like ACLED and ND-GAIN.
Climate Finance and Just Transitions in the Sahel
In the Sahel region, the discussion around Just transitions is salient given the high dependence on agriculture, pastoralism and other forms of informal livelihoods that are climate sensitive and structurally marginalised (Newell and Maulvaney, 2013). However, the concept of Just transition in this context ensures that there is a shift towards low-carbon and climate resilient economies and attentive is paid more to vulnerable groups. Just transition emphasizes the increased use of technology and improved investment to facilitate the redistributive financial policies that ensure that climate finance does not entrench existing inequalities.
Most climate finance mechanisms existing in the Sahel such as the Green Climate Fund (GCF) fall short of supporting Just transitions. Loan-based instruments often exclude smallholder farmers, women entrepreneurs, and youth, who lack collateral or access to formal banking institutions. This financial exclusion not only undermines adaptive capacity but also perpetuates cycles of poverty and insecurity. A Just transition approach calls for grant-based funding, concessional instruments tailored to vulnerable communities, and participatory governance structures that integrate local knowledge and priorities (Heffron and McCauley, 2018).
To align the concept of climate finance with Just transition in the Sahel region, there is a need to address the gender dynamics of labour and livelihood. Women constitute a majority of agricultural labour yet they face systemic barriers to financial access. Climate finance that invests in women’s cooperatives, digital inclusion, and climate-smart agriculture has the potential to reduce both economic marginalization and security risks. In this sense, Just transitions represent not only a path to sustainability but also a security strategy rooted in human dignity, equity, and resilience.
Table 1: Climate Vulnerability Ranking of Selected Sahelian States
Source: Compiled by Author with data from ND GAIN Index, 2023.
Challenges to Gender-Inclusive Climate Financing in the Sahel
The Adaptation Finance Gap
A data-backed critique of current climate finance flows to the Sahel reveals a stark discrepancy between stated commitments and actual delivery. According to Oxfam, during the period from 2013 to 2019, the West African region which includes the Sahel received a total of $11.7bn in international climate finance, an average of $1.7bn per year. This amounts to a wholly inadequate $4.90 per person per year, an amount that does not even meet the daily poverty threshold of $5.50 (Oxfam, 2022). A deeper comparison with countries stated needs in their Nationally Determined Contributions (NDCs) reveals an alarming 82% adaptation finance gap. This lack of sufficient funding is a fundamental and existential obstacle to building climate resilience in a region that is among the world’s most vulnerable.
Figure 1: Regional Gender Gaps of Account Ownerships in Sub-Saharan Africa (2021-2022. Source: Designed by Author with data from World Bank Global Findex Database.
Figure 1: This stacked bar chart illustrates the regional gender gap in account ownership within Sub-Saharan Africa with a total of 49 countries, 23 ranked low-income countries, 12 ranked Upper-middle income counties and 14 high-income countries, this data chart excludes high-income countries. The result shows that 58% of account holders are male, compared to 42% who are female. This disparity highlights a significant gender gap in access to financial accounts, with men being more likely than women to own or have access to formal financial services. This underscores the persistent challenges women face in financial inclusion across the region, reinforcing the need for targeted policy interventions to reduce gender inequalities in access to financial systems.
A Debt Centric Approach
A deeper analysis of these financial flows reveals a critical and structural flaw, a disproportionate reliance on debt instruments. The analysis shows that 62% of all climate finance to the Sahel between 2013 and 2019 consisted of loans, while grants only saw a modest increase of 79% (Oxfam, 2022). This over-reliance on debt adds a dangerous debt burden to nations already struggling with high debt and poverty rates. This finding directly contradicts the principles of a Just transition, as it places the financial burden of climate adaptation on the very countries least responsible for the crisis, risking further debt distress and compromising their long-term development objectives.
However, this paper examines how climate related financial regulations aimed at mitigating systemic risks further exacerbate financial exclusion in the Sahel region. While the various efforts made to align financial markets with sustainability goals are important, the analytical World Bank working paper of year highlights countries facing the high risks of exclusion. Without deliberate efforts towards inclusion-focused planning, new rules on disclosure or risk management by stakeholders could further marginalise vulnerable populations of these troubled states and groups which include small-scale traders, farmers and micro, small and medium sized enterprises (MSMEs) (Dias, 2025). These groups often lack the formal systems, financial literacy, and administrative capacity to comply with various complex regulations, making it more difficult for them to access the very green finance they need for climate adaptation and transition. This creates an unending cycle where policies designed to achieve climate finance goals inadvertently reinforce existing inequalities and exclusion.
Figure 2: Digital Financial Transaction Gap by Gender in Selected Sahelian States (2021-2022). Source: Designed by Author with data from the World Bank Global Findex Database.
Figure 2: This stacked bar chart presents the distribution of digital payment transactions in areas affected by climate change shocks under this study between 2021 to 2022, In Senegal, the use of digital payments is heavily dominated by men, similar to Nigeria . Burkina Faso and Niger also display noticeable gender gaps, likewise in Chad the situation persists. The consistent gender imbalance in the adoption of digital payments in the six countries underscores the systemic barriers that hinder women from full participation in the digital ecosystem.
Ambiguity of definition and Adequacy
Beyond the volume and composition of climate finance, a key challenge lies in the very definition and reporting of these funds by major institutions. The Paris Agreement includes a commitment from developed nations to provide $100 billion in climate finance annually to developing countries (CGD, 2024a). However, this goal has been missed and the funds that have been provided have been widely criticized for a lack of transparency and a lack of additionality. A review of 2,554 World Bank projects financed between 2000 and 2022 revealed a strong bias toward mitigation, even in the poorest countries that account for less than 1% of global emissions (CGD, 2024b). This pattern continued into fiscal years FY23 and FY24, where only about one-third of the total spending ($55 billion out of $153 billion) was tagged as climate-related (Kenny et al, 2025).
A significant concern is the broad definition of what counts as climate-related financing, with many projects being labelled as climate-focused even when less than 10% of the loan value is allocated to climate activities. This practice of labelling a small portion of a large number of projects as climate-related makes it difficult to assess how much of the finance is truly new and how much additional funds would not have been provided without a climate focus. This problem of definition and transparency remains a barrier to ensuring climate finance is effectively and equitably channeled to where it is needed most.
Financial Exclusion as a Catalyst of Insecurity in the Sahel Region.
According to an International Monetary Fund IMF report (2020), in the Sahel region, the significant and persistent gap in financial inclusion serves as a great barrier to resilience in the region in countries such as Nigeria, Niger, Mali, Chad and Senegal. Similarly, data from the World bank Financial Index database shows that only about 37% of women in this climate change affected region possess a bank account compared to men with about 48% (Morsy, 2020).
This structural exclusion and lack of access prevent women and other vulnerable populations which includes poor households, disabled individuals, small-scale farmers and traders from building financial resilience against climate shocks. Inadequate access or lack of access to formal savings mechanisms, credit or climate insurance, puts households at high risk and thus contributes towards them becoming reliant on informal coping strategies during crisis such as selling off valuable items and properties, and reducing food consumption. All of which inadvertently heightens the risk of malnutrition among children and could potentially lead to increased poverty (Crawford, 2015).
The lack of financial safety net makes them more vulnerable in the face of climate change shocks such as erratic weather patterns and environmental degradation, which directly contributes to food insecurity and loss of livelihoods.
Figure 3: Count of Violent attacks in selected Sahelian countries (2021-2022). Source: Designed by Author with data from ACLED.
Figure 3: This chart illustrates the distribution of violent attacks across the six Sahelian countries under this study; it shows the significant variation in the number of attacks as Nigeria in 2021 and 2022 recorded the highest number of attacks outpacing all other countries.
Figure 4: Account Ownership by Gender Across Selected Sahelian States (2021-2022. Source: Designed by Author with data from World Bank Global Findex Database.
Figure 4; This chart illustrates the consistent gender gaps in the countries under this study, particularly in areas affected by climate change shocks with the imbalance of women to men ratio, in Nigeria and Senegal, the gap is evident as more men own accounts compared to women. This finding highlights the urgent need for financial inclusive policies and targeted interventions that can bridge the gap in access to funds and digital literacy.
Financial exclusion in the Sahel region is a multifarious issue that extends beyond access to financial services. Usually, most traditional analyses focus more on the supply-side constraints, such as high interest rates of loan services and lack of collateral that affects women entrepreneurs disproportionately (Itriago, 2025). However, a more comprehensive analysis reveals that these barriers are compounded by significant demand-side factors. Various research on financial markets in Africa indicates that women are more likely than men to personally opt-out of the formal credit market due to low perceived creditworthiness. This behaviour is not necessarily a response to overt discrimination but rather stems from other factors which include low financial literacy, a learned risk aversion, or the fear of failure. This dynamic demonstrates that addressing the financial inclusion gap requires more than just policy reforms from financial institutions.
A fundamental shift in approach is needed, one that combines supply-side changes with behavioural interventions and social programs designed to increase financial literacy and confidence among women. The implication is that solutions must be multi-pronged, addressing not just the availability of financial products but also the conditions that enable vulnerable populations to confidently seek and use them.
Figure 5: Comparison of Financial Inclusivity between Male and Females Across Selected Sahelian States (2021-2022). Source: Designed by Author with data from World Bank Global Findex Database
Figure 5: The comparison depicts the financial inclusive level of both genders in each country. In Burkina Faso and Niger, there is a level of women being inclusive in green financing that helps to boost their daily livelihood in the region compared to other countries with visible gaps.
Pathways to Gender Responsive Inclusive Green Finance
Some effective pathways to an all-inclusive green finance already exist on a smaller scale such as through the World Bank’s Sahel Adaptive Social Protection Program (SASPP), which serves as a compelling case study for an inclusive, bottom-up approach to climate finance, this pathway is open to expansion (World Bank Group, 2024). The regional themes of this program spans across poverty, vulnerability and resilience; climate shock responsive delivery systems; Productive Inclusion for Women’s empowerment, Fragility and forced displacement, and Human Capital.
The program by the World Bank leverages digital payments and social registries to deliver timely support to vulnerable households, demonstrating a model for building climate resilience. One of its most relevant key-component is the concept of productive inclusion measures, this concept embeds community savings, loan groups, among several other tools that has helped to demonstrably increase the income of small-scale women traders and farmers, in addition to helping them diversify their income beyond climate-sensitive agriculture activities (World Bank Group, 2024b).
Furthermore, the program has shown strong cost-effectiveness, with impacts on beneficiary consumption exceeding the program costs in countries like Niger and Senegal. The evidence suggests that such digitally enabled systems can not only deliver aid efficiently but can also build long-term financial capabilities at the community level.
Figure 6; Gender Gap Trend of Financial Inclusivity in Selected Sahelian States (2021-2022). Source: Designed by the Author with data from World Bank Global Findex Database
Figure 6: This grouped bar chart illustrates the observed Gender Gap Trend of Financial inclusivity the countries under this study in two years, 2021 and 2022, comparing the score for Male and Female categories. The data reveals a significant overall reduction in the scores year-over-year, alongside a substantial decrease in the gender gap.
Implications for Policy Reforms
Based on the findings of the study, the paper proposes a framework for rethinking climate finance in the Sahel, one that is aligned with the principles of a just transition. This framework must include:
1. A fundamental shift in the composition of climate finance from loans to grants to alleviate the dangerous debt burden on highly vulnerable nations.
2. The intentional design of policies that actively mitigate the exclusion risks inherent in climate-related financial regulations, ensuring that smallholder farmers and MSMEs are not left behind.
3. The targeted expansion of digitally enabled financial services and adaptive social protection systems that can reach the last mile and provide a critical safety net against climate shocks.
4. The integration of women’s voices and leadership in all phases of climate finance planning and implementation, thereby ensuring that policies are co-created with affected communities they are intended to serve.
5. Strengthen the governance and financing models of Public Development Banks (PDBs) at national and regional levels, mandating them to prioritise adaptation projects that improve climate resilience and reduce borrowing costs for vulnerable nations, thereby embedding distributive justice in investment decisions (Itriago,2025).
6. Promote financial innovation, such as weather-indexed insurance and contingency risk financing mechanisms, backed by climate early warning systems, to transfer climate risks away from vulnerable households and ensure rapid, efficient financial response following climate shocks.
Conclusion
This analysis has demonstrated that financial exclusion, particularly for women, is a critical and often overlooked driver of insecurity in the climate-vulnerable Sahel. The evidence presented illustrates how the inadequacy and flawed structure of international climate finance namely, its reliance on debt over grants perpetuates a cycle of vulnerability and instability. By failing to provide the most vulnerable populations with the necessary financial tools to adapt to climate shocks, current policies exacerbate existing fragilities, undermine livelihoods, and contribute to the conditions that fuel insecurity. A genuine Just transition cannot be achieved without addressing the deep-seated gender inequalities in financial access.
However, to adequately address this complex challenge, policymakers, development banks, and international organisations must adopt a new, integrated approach. Such scaling of different adaptive social protection systems, that is digital finance platforms dedicated to financial regions affected by climate change shocks should incorporate women as key beneficiaries and also allow diversification of incomes, most national adaptation plans designed under the World Bank support program such as Sahel Adaptive Social Protection Program (SASSP) should include as part of their core objective adaption planning and resilience implementation. They should be anchored to specifically strengthen and enhance sustainability while ensuring equal access to dedicated climate finance streams.
It is pertinent to note that all climate finance planning should embed gender leadership and that is gender-responsive, with deliberate and intentional efforts to include women’s voices especially those in regions affected by these climate shocks in each country under this study. The design of these programs should also ensure that the supply and demand side of financial inclusion barriers are being addressed by ensuring the empowerment of women through economic opportunity that goes beyond climate reliant agriculture, at this juncture economic diversification should be encouraged, skill acquisition and migration should become a shield and available options to be explored by women and girls affected.
Leadership and education is also critical to climate finance inclusion, exposure to financial literacy is very essential for women and the continuation of education for the girls, amidst all these reforms women should be allowed in their local communities to lead adaptation programs and also have access to finances while being guided and monitored by stakeholders to coordinate effective adaptation programs in these regions. These in turn support the growth of local communities and also open them to economic diversification beyond agriculture and pastoralism while also shielding the population from exploitation by violent extremist groups. The absence of poverty in the Sahel region can inadvertently eliminate the power and exploration of vacuums being explored by these groups in these troubled areas.
Additionally, in order for financial exclusion to be diminished as a catalyst for human insecurity it is important that financial aid must be restructured to prioritise grants over loans, thereby alleviating the Sahel region’s debt burden and freeing up resources for climate adaptation. Furthermore, investments should be directed toward scaling up proven models of inclusive finance, such as adaptive social protection systems that leverage digital technology to reach marginalized communities. Most importantly, all climate finance planning must be made gender-responsive, with deliberate efforts to include women’s voices in decision-making and to design programs that address both the supply and demand-side barriers to financial inclusion.
References
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