Lesotho: Building a comprehensive disaster risk financing approach to support small and medium businesses

This case study shows how Lesotho is moving from reactive disaster response to a pre-arranged, layered financing system, anchored in its first national disaster risk financing strategy and a dedicated resilience window for micro, small, and medium enterprises (MSMEs).

Small businesses make up 85% of firms in Lesotho, yet most are informal and have little protection when droughts and floods strike. Supported in part by a US$8.5 million GSFF grant, the approach prioritizes women-owned businesses and builds on the country's first sovereign drought insurance payout in 2025.