Lessons from Mozambique, Tanzania, and Uganda: What CGAP’s National Surveys can teach us about smallholder households

Published on

September 19, 2016

CGAP’s National Survey(s) and Segmentation of Smallholder Households in Mozambique, Tanzania, and Uganda explores the financial, agricultural, and digital demands of smallholder households.  The surveys are a groundbreaking effort to build a representative evidence base for the demand-side of the smallholder finance equation.  The links above provide access to both summary reports and full micro datasets for each country, for further analysis.  This blog summarizes a few of the key themes and specific variations across the three countries.

By: Ann Murage, RAF Learning Lab


In collaboration with GIZ, FSD Mozambique, and FSD Tanzania, CGAP’s nationally representative surveys were conducted to map activities, interests, aspirations, barriers, and pressures facing smallholder households in each country. Agriculture is central to each of the three economies, contributing about one-quarter of GDP and employing a majority of people: ranging from 67% for Tanzania to over 80% in Mozambique (from most recent WDI data). Thus, the development of the sector is critical for the countries’ sustainable development and improved quality of life. The research builds an evidence base from which the rural and agricultural finance (RAF) community can support the development of products and services that are better aligned to smallholders’ needs and preferences.


Across all three countries, researchers identified four recurring themes:

  1. Certain segments of smallholder farmers have limited financial resources, and struggle to meet daily needs (food, clothing, etc.) leaving them with less capacity to save, plan for emergencies, or make investments. As a result, diversification out of agriculture is a necessity.
  2. Over-dependence on agriculture, which is characterized by seasonality of returns, is extremely risky for smallholders who seek to diversify their income sources.
  3. Findings indicated that much of the younger generation is conflicted between committing to a career in agriculture and seeking full-time urban employment. While the youth in some areas (e.g. Mozambique) hold some aspirations for the opportunities in agriculture, the majority perceive the sector as offering a difficult, high risk, and low reward career path, leaving some doubt as to who the farmers of the future will be.
  4. Despite these risks and challenges, researchers across all three countries noted a positive outlook by smallholder farmers on their prospects in agriculture.  Consistent across farmer households in the three countries, farming emerges as a life choice and part of an identity with majority seeking to expand their agricultural activities.


Despite these similarities, each country maintains unique variations:

  • Exposure to and utilization of financial products from financial service providers. Varying levels of knowledge, usage and uptake of formal financial solutions exists within the various countries. Many smallholder farmers in Uganda operate without using formal financial services although they express trust in financial mechanisms. In Mozambique, most smallholders have not been exposed to formal financial solutions whereas Tanzanian farmers showed a higher awareness and interest in formal financial solutions (illustrated by utilization of savings and investment products) providing a good environment for further interventions.
  • Uptake and utilization of mobile money platforms. The study observed that few Mozambican smallholders owned mobile phones with many showing limited interest in using the devices or uncertainty of the phone’s value proposition. However, in Uganda, ownership of phones and use of mobile money services has grown steadily in recent years, greatly resulting to the rising level of financial inclusion. Smallholder farmers in Tanzania nevertheless proved to be the most advanced in their use of mobile phones and mobile money, indicating Tanzania’s higher digital readiness and accompanied need for pragmatic, customer-centric solutions.
  • Profiles of smallholder farmers. Within the three countries, five segments of smallholder famers were identified based on attitudinal and behavioral characteristics: (i)“farming for sustenance” which stands to gain the most from financial and agricultural mechanisms; (ii) “battling the elements” which remains optimistic despite harsh economic challenges; (iii) “diversified and pragmatic”; (iv) “options for growth”; and (v) the “strategic agricultural entrepreneurship” segment whose model inspires growth in other segments and has highest success in agricultural activities. The surveys’ findings show that the highest “strategic agricultural entrepreneurship” segment (18%) is in Tanzania and highest in “farming for sustenance” segment (77%) in Mozambique. Cross learning across segments and sharing of industry practice among industry players in the different countries would be highly beneficial.


In order to help scale financial solutions, increase financial inclusion, and strengthen the RAF ecosystem, a concerted effort will be needed from all industry players including governments, multilateral organizations, FSPs, TA providers, and other value chain actors. These efforts will not only improve the lives of smallholder farmers but also contribute to the growth of the agriculture and agribusiness sector in Africa which, by World Bank estimates, could “command a USD 1 trillion presence in Africa’s economy by 2030.” National smallholder surveys make these efforts more effective by providing a better understanding of the smallholders that are the key players in this agricultural transformation, and the customers the finance industry needs to more effectively serve.

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