“Gideon is a rice farmer,” the researcher tells me. Under the auspices of CGAP's financial diaries project, she has been visiting with Gideon and his family for several months now, gathering detailed financial information every 2 weeks. “He is better off than many in the village, since he has a good sized plot of land and can grow several different crops.”
Financial diaries interviews are intense and intimate – researchers ask individuals direct questions hoping to find out the exact sources of their income, and where that money is going. Our aim is that after a year of interviews with similar families in 3 different countries – Tanzania, Mozambique, and Pakistan - we will have amassed enough data and qualitative explanations to track the financial trajectory of these people’s lives and pinpoint areas where formal financial services can make a difference.
After interviewing Gideon for nearly two hours about his farm and finances, we learn that rice is just the beginning of his story. A prerequisite for being a successful smallholder farmer in Tanzania is the ability to diversify – the dry season can be brutal, and farmers need livelihoods that sustain them through all seasons of the year, regardless of the weather. Gideon clearly had an intimate understanding of this because during the interview, we counted at least 10 different agricultural ventures he had going on.
One of the first things Gideon told us about was his 30 avocado trees scattered throughout his plot of land. They take about 3 years to mature, and the first trees were getting close to bearing fruit. He was excited since he hadn’t really heard of many other people growing avocados, so he thought they might be an investment that paid off. After the avocados, Gideon emphasized his successful spinach crop, the beans, the papaya, the bananas, the maize, and even the catfish traps that he had fashioned in the river cutting through the village. Combined with the chickens, cows, and ducks around the household, Gideon’s family had a pretty varied diet.
One other occasional cash flow Gideon’s interview unveiled was income through mobile money transactions. The week we interviewed him, he earned about 3,000 shillings (around $1.70) from neighbors by sending mobile money payments on their behalf. Gideon, unlike many others in his village, has a mobile phone. In addition to bringing in this extra cash, the phone was a key enabler for his agricultural business because it helps him stay in touch with a regular buyer. Every so often Gideon can call the buyer and let him know about items he has for sale. His access to a cell phone begs the question – what other services could this connect him with?
Amim is another Tanzanian farmer living close to Gideon whose life follows similar patterns, although his tendency was to fill in the dry season income with more non-agricultural side enterprises. He obtained two sewing machines, which he and his wife use to tailor clothes. Amim has little experience but is learning as he goes. His wife, Husna, knows much more about tailoring and handles the women’s garments. “At first, Husna was opposed to the machines and we fought over them after I brought them home,” he said. “But, now, we work together on the tailoring, and I’ve learned that when we do it together, we can make more money.” The tailoring is just one of Amim’s side enterprises. Others include a little stand where villagers can buy sodas and candies, repairing motorbikes as well as making mud bricks and constructing houses for others, including the village headmistress. “She paid me 40,000 shillings at the beginning of the job and I expect another 40,000 at the end of the project, which is about a week’s work in total.” The motorbike repair was also interesting because his best customer was the delivery guy who supplied his shop with candies and soda. "I can depend on him to come back with my supplies because I know sooner or later he'll need his bike fixed," he told us.
Like many of the 450 million smallholder farmers around the world, Gideon and Amim have diverse income streams that go beyond just agriculture. Despite being poor, this diversity has allowed them to take care of their families even under difficult circumstances. Still, with access to the right package of financial services tailored to the full array of their financial needs, Gideon and Amim can achieve a more secure lifestyle. By helping providers to better understand how best to serve clients like Gideon and Amim, we hope that the results of the research will help millions of smallholders to improve their livelihoods.