In partnership with Mercy Corps, Okapi carried out a comprehensive study on how to build business resilience for MSMEs, in the context of the December 2015 floods in Chennai. We find institutional voids and fragmentation; rapid development in hydrologically vulnerable locations; and mixed oversight in industrial planning and infrastructure development as some of the underlying conditions that exacerbated the impact of the sustained heavy rainfall. In addition to these, we collaborated with the TANSTIA-FNF Service Centre and the Madras Chamber of Commerce and Industry to do detailed interviews with 35 MSMEs. These highlight several aspects in the business environment – industry location, finance and capital arrangements, insurance, labour and supply chains – that both amplified and dampened the effects of the floods.We argue in favour of resilience becoming an integral part of evaluating the business environment, and the ease of doing business not only in Chennai but in broader business climate evaluation efforts. To this end, we suggest short, medium and long term steps towards enabling MSMEs to become more resilient in the face of natural shocks.
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