Smallholder family in Mozambique. Photo credit: Allison Shelley.
There are an estimated 500 million smallholder families around the world who rely to varying degrees on crops and livestock for income and food. They may also be small business owners, traders, day-laborers on other farms, and wage earners, as well as consumers, parents, pensioners, and more. Agriculture distinguishes them, but it doesn’t begin to tell their whole story.
But that narrative is often unclear. Reliable data on the financial lives of smallholder families has been scarce. Now new tools from CGAP, Insight2Impact, MIX, and One Acre Fund shed light on this massive untapped market for financial services and put a range of important demand- and supply-side data at your fingertips.
As part of its research, CGAP had the opportunity to meet thousands of smallholders, including Alberto, Alina, and their family in Mozambique. They have eight children, three studying in a nearby town and five smaller ones at home. They’re building a home and earn income growing cotton, maize, beans, millet and cassava, and from Alberto’s work as a tailor. They don’t have a bank account because they think they “need more money to use a bank,” and they don’t use savings and credit groups or mobile money either, though they do have a mobile phone. Alberto and Alina are most interested in having a bank card to avoid dealing with cash and to help them save money.
How might these new data tools highlight opportunities to better meet their financial needs? Alberto and Alina’s story isn’t the same for all smallholder households in Mozambique. There’s a lot of diversity in the sector. But we can look at their experience and see the general contours of a profile – multiple income streams, building for their future, children in school in town and at home, awareness of banks and mobile money but use of neither – and then take the perspective of a provider: How we might better meet their financial needs? What do the data say?
Let’s turn to these three tools for answers.
CGAP Smallholder Families Data Hub
CGAP has engaged with smallholder families in several markets to better understand their needs, aspirations, and behaviors and worked with providers to answer them with improved financial solutions.
Now a new data visualization tool—the CGAP Smallholder Families Data Hub—brings this research and its 300,000+ data points to your fingertips. Drawing on CGAP’s nationally-representative smallholder household surveys in six countries, the Data Hub offers insight into smallholders’ income sources and regular expenses to their use of financial tools and attitudes toward providers and more. Disaggregate the data with easy drop-down menus, export charts to presentations, and download the data sets, methodology, and analyses to dig deeper.
Thinking of Alberto and Alina’s family, use the chart on ‘Trust in Providers’ in the Mozambique tab for a glimpse of market perceptions among smallholders. With Alina in mind, disaggregating this data by gender and age, we see that banks have the advantage in Mozambique. And mobile money providers? They’ve got to introduce themselves. Almost three-quarters (71%) of smallholders like Alina don’t know or feel neutral about them – a market gap waiting to be filled.
i2i Data Portal
Incorporating data from CGAP’s demand-side smallholder surveys and financial diaries, the i2i Data Portal invites users to dive even deeper and to compare and analyze 29 national data sets, seven financial diaries, and six geospatial datasets from a range of African and Asian countries. And more datasets are coming! i2i continues to embed additional data into the Data Portal, so there is always more to learn and explore.
Users can select a range of variables to display and explore the data over various timelines and levels of detail – the charts can be as simple or complex as needed. You can examine a smallholder’s household and see how they manage their finances over a 12-month period and then export these insights and widgets to reports and presentations and share them on social media.
The i2i Data Portal can filter by geographic area, and this can be useful when considering that Alberto and Alina live in the Nampula district in northern Mozambique. This allows comparison of financial activities, in combination with other filters, to highlight differences and opportunities across areas and smallholder profiles. What financial tools might be actively used in other provinces but not yet in Nampula, and how can providers best penetrate these new markets?
MIX and One Acre Fund Smallholder Finance Product Explorer
MIX and One Acre Fund have teamed up to improve the quality and availability of the operational data that helps drive product development. Currently in beta, the Smallholder Finance Product Explorer offers rich data on smallholder finance products and is designed to enable financial services providers to share knowledge and learn from each other. Additionally, funders and investors can more easily identify partners and support them to develop, launch and refine farmer-centric products.
Currently in beta, the Product Explorer offers detailed, operationally useful information on smallholder financial solutions being offered by innovative providers around the world. Using what we know about Alberto and Alina’s goals, financial preferences and behaviors, and main sources of income, we can search through the Product Explorer to identify examples of financial products that might suit their needs.
For instance, school fees are an important expense for them, and for many smallholder families like them. Using their accumulated savings for school fees may mean they have little money left for other important purchases, such as farming inputs. With their profile in mind, a search through the Product Explorer surfaces examples of input loans that have a flexible repayment structure that suits their lumpy cashflow. Such a product would allow them to get access to the inputs they need when they need them, thus keeping their savings for school fee payments later on in the year. Could these financial solutions, successfully serving smallholders in other markets, also work in Mozambique? What can we learn from these products that might help us improve our own offering to smallholder farmers?
And that’s where the story continues, for Alberto and Alina and their family, millions of other smallholder households, and the cast of characters working to improve access to the financial solutions they need. Explore these data tools, and deploy their insights to help write the next chapter in this story.
The A-Card is a new business model helping smallholders in Bangladesh gain access to finance through a digitized four-way linkage between farmers, banks, MFIs and agricultural input retailers. CARE shares how it works and their lessons learned.