Lesotho is pioneering a new approach to disaster financing, focusing on small and medium-sized enterprises (SMEs).

By shifting from reactive responses to a pre-arranged system, Lesotho aims to bolster resilience among its businesses. This strategy includes the country's first national disaster risk financing plan and a dedicated fund for MSMEs.

The new approach means that when disasters strike, SMEs will have quicker access to funds, reducing their financial vulnerability.

This proactive stance could significantly reduce long-term economic damage from future disasters, ensuring businesses can recover faster.

Can local infrastructure withstand future compounding shocks?

Lesotho's new disaster financing strategy is a critical step towards building resilient SMEs. However, the broader infrastructure still faces challenges in handling multiple shocks. The dedicated resilience window for MSMEs offers hope but requires sustained investment and policy support to truly fortify against future disasters.

The outlook remains cautiously optimistic with significant work ahead.