Locally-led action: The missing link in crisis finance

The recent report from the High-Level Panel on Closing the Crisis Protection Gap sets out a vision of a crisis financing architecture that is fit for purpose and equipped to meet present and future challenges. 

Start Network was delighted that Kazi Hoque, Senior Director of Strategic Planning and Head of Climate Action at Friendship NGO and Chair of the Start Ready Committee, sat as a member of the High-Level Panel and was able to bring the perspective of local actors and emphasise the importance of locally-led action in transforming crisis finance.

The need to close the crisis protection gap could not be more urgent. Despite our ability to model future risks with ever greater precision, only 2% of international crisis finance is pre-arranged, of which only 1.4% reaches low-income countries [1]. This leaves vulnerable communities exposed to the worst impacts of climate hazards and dependent on reactive, fragmented humanitarian responses, particularly in fragile, conflict-affected, and vulnerable (FCV) settings.

The High-Level Panel report identifies investing in scaling action in FCV settings among the ten strategic recommendations to close the crisis protection gap. Despite the disproportionate vulnerability of FCV settings to the climate crisis – 18 of the 25 countries most vulnerable to climate change are fragile and conflict-affected settings [2][3] – government capacity to coordinate and execute crisis financing strategies in these contexts is generally limited or absent. To overcome the barriers and gaps in governance which limit the coverage of pre-arranged finance in FCV settings, locally-led action is the missing link, here is why: 

First, local actors are able to bridge crisis protection gaps in FCV settings. In Zimbabwe [4], Start Ready – Start Network’s risk financing mechanism – was activated in 2022 in anticipation of worsening drought to fund five projects ahead of peak hunger season. The projects were implemented by a consortium of international, national, and local actors, including two local agencies – FACT Zimbabwe and Nutrition Action Zimbabwe. Start Ready funding was layered with funding released via the ARC Replica model, but at a lower threshold to the ARC Replica policy to ensure Start Ready complemented the work of ARC Replica, which addresses larger-scale droughts. Risk layering in this way aimed to prevent the uptake of negative coping mechanisms by the most vulnerable communities for moderate drought events. 

The project had a significant impact, reducing  ‘poor’ Food Consumption Scores from 21% to 3.7% and increasing monthly household income [5]. Start Ready, which embeds principles of locally-led action – from governance and decision-making to programme design and implementation, filled a valuable gap in the crisis protection architecture and disaster risk management system in Zimbabwe, ensuring the widest number of most at-risk people were supported. 

Second, locally-led action ensures pre-arranged financing effectively addresses the unique risks faced by vulnerable and marginalised communities in FCV settings. In DRC, Start Network has supported the DRC Hub in building a disaster risk financing (DRF) system that allows civil society actors to proactively manage disaster risks and act in advance of disasters. 

During the 2022-23 flood season and amidst significant flooding in South Kivu and Maniema, Start Ready was activated and two local agencies, AFPDE and MIDEFEDHOPS, were awarded GBP 523,000 to implement pre-agreed contingency plans to respond to the impacts of flooding. In addition, Start Network members were able to request Start Ready National Reserve funds in January, three months before the trigger in March, to carry out preparedness and anticipatory activities [6].

The project evaluation underscored the importance of including local actors in the development of DRF systems to localise data and risk models so that they include the most vulnerable and hard-to-reach populations. Global data sources and platforms often lack granular country-level data in FCV settings, highlighting the need to invest in locally-led action to close the crisis protection gap.

It is also worth noting that local actors have a critical role to play in deploying crisis finance and ensuring the sustainability and scalability of DRF systems across diverse crisis contexts. This includes non-FCV settings where government capacities for risk management are low or where governments are facing major fiscal constraints preventing investments in planning, preparedness, and pre-arranged financing.

Third, prioritising locally-led action is important to ensure that efforts to scale-up pre-arranged financing do not inadvertently exacerbate the crisis protection gap between FCV settings and non-FCV settings. Taking the example of climate finance, it is clear that funds has been overwhelmingly channelled to governments and international actors with the capacity to absorb and disburse large sums of money. Between 2014-2021, climate finance per person in extremely fragile states was nearly 1/80th the among of climate finance per person in non-fragile states [7].

A similar pattern is true for pre-arranged financing. Pre-arranged financing coverage remains highly concentrated in high-income (16.6%) and upper-middle-income (47.4%) countries. While there have been modest improvements in the coverage of pre-arranged financing in lower-middle-income countries (32.5%), coverage in low-income countries remains fractional (3.2%) [8]. Donors, policymakers, and technical agencies should invest in establishing and/or enhancing systems that strengthen the capacity of local actors to absorb pre-arranged financing and lead anticipatory action.

To achieve the High-Level Panel’s ambitious headline recommendation of increasing tenfold the proportion of crisis finance that is pre-arranged by 2035, it is imperative that more crisis finance is directed to and through local actors with an established presence and credibility in vulnerable communities that are beyond the reach of governments and international actors. This is the only way to effectively close the crisis protection gap and ensure that the most climate-vulnerable communities are not left behind. 

[1] High-Level Panel on Closing the Crisis Protection Gap (2025). Crisis Protection 2.0: Future-Proofing Our World. https://www.crisisprotectiongap.org/

[2] Notre Dame Global Adaptation Initiative (2025). ND-GAIN Country Index. https://gain-new.crc.nd.edu/ranking

[3] World Bank (2025). FY25 List of Fragile and Conflict-affected Situations. https://thedocs.worldbank.org/en/doc/b3c737c4687db176ec98f5c434d0de91-0090082024/original/FCSListFY25.pdf 

[4] Zimbabwe is included on the World Bank’s lost of countries affected by institutional and social fragility. See: https://thedocs.worldbank.org/en/doc/b3c737c4687db176ec98f5c434d0de91-0090082024/original/FCSListFY25.pdf

[5] Start Network (2023). Start Ready Risk Pool 1 Summary Report. https://startnetwork.org/learn-change/resources/library/start-ready-risk-pool-1-summary-report 

[6] Ibid.

[7] Reda, D. and Wong, C. (2021). Climate Finance for Sustaining Peace, UNDP. https://www.undp.org/publications/climate-finance-sustaining-peace-making-climate-finance-work-conflict-affected-and-fragile-contexts

[8] Plichta, M. and Poole, L. (2024). The State of Pre-Arranged Financing for Disasters 2024, Centre for Disaster Protection. https://www.disasterprotection.org/publications-centre/the-state-of-pre-arranged-financing-for-disasters-2024