Yemen’s microfinance sector is undergoing a radical transformation. Despite initial success in empowering small businesses, the ongoing conflict has exposed deep vulnerabilities. Competition between the fractured central banks has driven a surge in microfinance bank (MFB) licenses. While this promises to expand financial inclusion, it raises serious concerns about long-term sustainability and financial stability. To ensure a sustainable future for the sector, a collaborative effort is needed from the CBY, MFBs, and international donors. This RYE Policy Brief brings forward practical recommendations to this effect.

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Yemen’s agricultural communities face a perfect storm of growing ecological threats amid protracted conflict. Flash floods destroy farms, crops, and irrigation systems. Late rains risk drowning mature harvests, and waterlogged fields hinder root growth. Coastal areas battle salinization, and collapsed roads and buried wells hamper recovery. As flooding and changing rainfall patterns undermine yields, farmers struggle to sustain their livelihoods. This policy brief examines the impact of floods on agricultural communities, based on the discussions and outcomes of a workshop implemented by the Rethinking Yemen’s Economy initiative with representatives from different governorates in Say’un, Hadhramawt, in 2023. It presents an analysis of the impacts of flooding and explores local prevention, mitigation, and adaptation measures and concludes with policy recommendations to mitigate flooding and its impact on agricultural communities, enhance food and water security, and build resilience against future extreme weather events. 

Download the Policy Brief in English or Arabic