Disclaimer:
Please be aware that the content herein has not been peer reviewed. It consists of personal reflections, insights, and learnings of the contributor(s). It may not be exhaustive, nor does it aim to be authoritative knowledge.
Title
Please provide a name for your action learning plan.
Revolving Fund for Community Livelihood Resilience
Challenge statement
Challenge type: If you are working on multiple challenges, please indicate if this is your "big bet" or "exploratory" challenge.
Please note: we ask you to only submit a maximum of 3 challenges - 1x Big Bet, 2x Exploratory. Each challenge must be submitted individually.
EXPLORATORY
Challenge statement: What is your challenge? (Please answer in specific terms: "Our challenge is that...”.)
Our challenge is that Indonesia doesn’t have enough fast, reliable funding to help communities and small businesses to recover from disasters. Current funds are limited, slow to access, and often depend on unpredictable foreign aid. This leaves people and local businesses at risk when disasters strike. To protect them, Indonesia needs a local, sustainable funding system that provides quick support to communities and MSMEs.
Background: What is the history of your challenge? What is causing or driving it? Who is involved? How does the current situation look like? What undesired effects does it produce?
Indonesia’s geographic location makes it highly vulnerable to natural disasters like earthquakes, tsunamis, and extreme weather events, worsened by climate change. Climate change has intensified these risks, leading to more frequent and severe weather events, which threaten communities and small businesses (MSMEs) that rely on natural resources.
Financing disaster response in Indonesia has been challenging due to limited government budgets, slow disbursement processes, and reliance on unpredictable foreign aid. The current funding system often delays immediate support, leaving communities and MSMEs vulnerable during critical times. This gap in financing hinders quick recovery and preparedness efforts, especially in high-risk areas where 40% of the population lives. Without a more reliable, sustainable funding source, communities and MSMEs face prolonged hardship after disasters, slowing economic recovery and risking long-term resilience.
Quantitative evidence: What (official) data sources do you have on this challenge that better exemplifies the importance and urgency of this frontier challenge? You can add text, a link, or a picture.
According to analyses conducted by the World Bank (2020), Indonesia ranks 12th out of 35 countries with the highest mortality risk from multiple hazards, with approximately 40 percent of the country’s population residing in high-riskareas. Another analysis by Bündnis Entwicklung Hilft (2019) placed Indonesia at the 27th position out of 180 countries with the highest disaster risk.
In 2023 alone, Indonesia recorded around 5,400 disasters, with forest fires, extreme weather, and floods being the top three. These events suffered and displaced nearly 8.5 million people and caused extensive damage to property and public infrastructure, with over 48,000 units affected.[1]
For MSMEs, a 2021 study by Statistics Indonesia found that 80% of small businesses are financially unprepared for disasters, leading to prolonged business closures and lost income post-disaster.
[1] https://dibi.bnpb.go.id/
Qualitative evidence: What weak signals have you recently spotted that characterizes its urgency? Please provide qualitative information that better exemplifies the importance and urgency of this frontier challenge. You can add text, a link, or a picture.
N/A
Value proposition: What added value or unique value proposition is your Accelerator Lab bringing to solving this challenge? Why is it your Lab that needs to work on this challenge and not other actors within UNDP, other stakeholders in the country respectively? Why is it worth investing resources to this challenge?
The Accelerator Lab takes a unique approach to co-design an innovative solution for financing disaster management tailored to communities and small businesses. By working directly with government and beneficiaries, we aim to create a revolving fund that self sustaining and truly meets their needs. Our partnerships enable us to bridge the gap between policy and practical action, while we also leverage expertise from across UNDP Country Office teams in environment, resilience, and sustainable finance to strengthen this solution. This initiative will not only speed up community recovery but also create a model for other disaster-prone areas, making it a valuable investment in UNDP’s mission for resilience and recovery.
Short “tweet” summary: We would like to tweet what you are working on, can you summarize your challenge in a maximum of 280 characters?
The UNDP Accelerator Lab in Indonesia is co-designing a revolving fund to enhance the resilience of communities and small businesses to escalating climate challenges.
Partners
Who are your top 5 partners for this challenge? Please submit from MOST to LEAST important and state Name, Sector and a brief description of the (intended) collaboration.
Please state the name of the partner:
Indonesia Environment Fund (IEF)
What sector does our partner belong to?
Government (&related)
Please provide a brief description of the collaboration.
IEF is a government-owned fund management agency that focus on environment, climate, and disaster.
Is this a new and unusual partner for UNDP?
No
Who are your top 5 partners for this challenge? Please submit from MOST to LEAST important and state Name, Sector and a brief description of the (intended) collaboration.
Please state the name of the partner:
Resilience Development Initiative (RDI)
What sector does our partner belong to?
Civil Society
Please provide a brief description of the collaboration.
RDI is a local think tank specialized in disaster management
Is this a new and unusual partner for UNDP?
No
Learning questions
Learning question: What is your learning question for this challenge? What do you need to know or understand to work on your challenge statement?
Our learning question for this challenge is: How can a community-driven revolving fund model be designed to ensure rapid, sustainable disaster financing for communities and small businesses, while balancing accessibility, financial sustainability, and accountability?
To work on this challenge, we need to understand:
1. The specific financial needs and priorities of communities and MSMEs in disaster-prone areas.
2. Effective mechanisms for fast, reliable fund disbursement and replenishment.
3. Strategies to align this fund with existing public fund management.
To what stage(s) in the learning cycle does your learning question relate?
Sense, Explore
Usage of methods: Relating to your choice above, how will you use your methods & tools for this learning question? What value do these add in answering your learning question?
To address our learning question, we’ll use brainstorming, data analysis, and participatory design. Brainstorming with partners will generate insights, diverse ideas, and identify possible challenges for the development of a revolving fund. Data analysis of disaster impacts and MSME needs will provide evidence-based insights to shape fund criteria. Participatory design will involve communities and small businesses in crafting the fund’s structure, ensuring it is accessibility and accountability.
Existing data gaps: Relating to your choice above, what existing gaps in data or information do these new sources of data addressing? What value do these add in answering your learning question?
To address data gaps, we’ll use external reports, focus groups, interviews, and stakeholder engagement. These data sources will provide a comprehensive understanding of the ecosystem, helping us design an effective, accessible revolving fund tailored to real needs.
Closing
Early leads to grow: Think about the possible grow phase for this challenge - who might benefit from your work on this challenge or who might be the champions in your country that you should inform or collaborate with early on to help you grow this challenge?
Future key beneficiaries including cooperatives, MSME associations, and community organizations focused on disaster resilience. Early collaboration with agencies like BNPB (Indonesia's National Disaster Management Authority) and the Ministry of Cooperatives and SMEs would be essential for scaling and institutional support. Additionally, engaging financial institutions and sustainable finance experts can help ensure fund sustainability and broaden its reach.
END OF ACTION LEARNING PLAN: Thank you! The form saves automatically and your submission has been recorded. You may now exit this window.
1No poverty
8Decent work and economic growth
13Climate action
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