New CGAP Report Provides Unique Insights into the Financial Lives of Smallholder Families

A new CGAP report released today documents the financial lives of a select group of smallholders in three countries, offering a unique window into the struggles, risks and trade-offs they face on a daily basis. The report also provides recommendations on the types of financial services that could improve the lives of this important group of people.

There are an estimated 500 million smallholder households (approximately 2 billion people) around the world. These small-scale farming families make up a significant portion of the world’s poor who live on less than two dollars a day. Until now, little was known about their financial lives.

CGAP’s Financial Diaries with Smallholder Households fills this information gap through a year-long study tracking the income, expenses, and agricultural production of 270 smallholder families in Mozambique, Tanzania, and Pakistan. Approximately 500,000 data points shed light on how these households manage their money and face challenges from climate shocks to unexpected health issues.

Jamie Anderson, Financial Sector Specialist at CGAP states: “Financial service providers and others working with small-scale farming families need to know how diverse this market is. Insights from the Smallholder Diaries can help them tailor solutions to the various profiles of smallholder households.”

The report offers market-specific recommendations. These range from financial tools aimed at improving agricultural production and crop storage in the Mozambique sample, which was comprised of mainly non-commercial smallholders; diversified savings instruments for the households in Tanzania, who sold more agricultural products than they consumed; and tools for facilitating relationships with middlemen in the Pakistan study, who sold nearly all of their agricultural products.

While the methodology and sample size are not statistically representative of smallholder families in a given country, the findings from this study are broadly representative of the various types of smallholders around the world.

Source: PR News Wire