An Introduction to the Small Firm Diaries

What kinds of livelihoods do small firms provide for their owners, and what kinds of jobs do they create? What alternatives do owners and employees have: when they choose employment in a small firm, what options are they leaving aside? Looking at their business practices, are these businesses predominantly informal or are they registered with local authorities? Are they well-integrated into formal banking systems, and are they adopting digital financial tools? Or do they rely on informal means of managing money—like savings groups and loans from friends and family—and operate in cash?

The Small Firm Diaries is a global research initiative to better understand small firms in low-income neighborhoods of developing countries, especially the barriers to growth such firms face, through high frequency quantitative and qualitative data collection (“financial diaries”). In each country, a team of locally-hired field researchers visited a sample of about 100 small business owners weekly for a year, gathering data about financial flows and the decisions behind those flows. From 2021 to 2023, the project was active in 7 countries: Colombia, Nigeria, Uganda, Kenya, Ethiopia, Indonesia, and Fiji.

The goal of this study was to inform policy and practice by a wide variety of actors: financial services providers, business support organizations, government policy makers, funders and other researchers can all use the data and findings of the Small Firm Diaries project to deeply understand and address challenges of small businesses in low-income communities.