How do African SMEs respond to climate risks? Evidence from Kenya and Senegal

Abstract

This paper investigates to what extent and how small and medium-sized enterprises (SMEs) in poor countries are adapting to climate risks using data from 325 SMEs in the semi-arid regions of Kenya and Senegal. There is a clear role for public policy in facilitating good adaptation. The ability of firms to respond to climate risks depends on factors that can be shaped through policy intervention. Findings show that financial barriers are a key reason why firms resort to reactive coping mechanisms, while general business support, access to information technology and adaptation assistance encourages sustainable adaptation responses.UK Government’s Department for International Development (DfID)Financial support from the Grantham Foundation for the Protection of the Environment, and the UK Economic and Social Research Council (ESRC) through the Centre for Climate Change Economics and Polic