At FAI we have begun convening conversations with a small group of researchers collecting high-frequency data on the financial lives of households and small businesses. All members of the group are managing, through modified survey techniques, to continue (or start) data collection during the COVID-19 pandemic and lockdowns. Data collection is frequent, in some cases daily, but at least once a month. Our goal is to get a sense of the reach and scope of these somewhat similar studies, while facilitating collaboration among researchers to learn from one another, for example on streamlining and improving survey questions, and analyzing and interpreting high frequency data gathered in these circumstances. We also aim to support the use of the very granular data that emerges from these projects, contextualizing or aggregating it, to contribute to more informed, pro-poor policies and services.
In this blog post we highlight the latest report out from Stuart Rutherford of the Hrishipara Diaries. Rutherford pioneered the financial diaries methodology in 1999, and since 2015 his project has been collecting data daily from 60 diarists living in Hrishipara, a neighborhood on the outskirts of a medium-sized market town in central Bangladesh, about 50km to the northeast of Dhaka. The project has produced more than eight million data points, comprising the unique transaction records that result from families receiving money from relatives abroad, taking out loans to purchase supplies for their business, buying food and essentials for their homes—in essence every single financial decision made by these 60 families. The project also collects qualitative data, giving outsiders the chance to understand the diarists’ views in their own words.
The ongoing reports from the Hrishipara Diaries illustrate the value of collecting high frequency data on financial transactions, as the data provide a detailed and intimate view into how one community is experiencing the coronavirus restrictions facing nearly everyone on our planet in one form or another. As we accumulate more data we’ll be able to better understand how households are coping (or not coping) and the choices and decisions they are faced with both in the current crisis and in the aftermath—and how those choices and decisions may differ from choices they have made in the past. As we all talk about “the new normal” or “getting back to normal” it is data like this that will let us assess the reality of those two easy-to-use but hard-to-define phrases.
Since March of this year, the project has been producing analysis and visualizations of the data on a dedicated coronavirus page, and summarizes findings at the end of each month. From this month’s analysis, published in full at the University of Manchester Global Development Institute’s blog, a few especially interesting points leap out, some that echo findings my colleagues documented in their just-published study of microfinance borrowers in Pakistan, and others that add new knowledge or additional texture to our understanding of the impact of pandemic lockdowns. For example:
Income: In April, across all categories except for some regular wage earners, earned income fell sharply. Deepening the blow, overseas remittances, previously a major source of income, fell sharply as relatives abroad were also unable to work.
Expenditure: Diarists spent four times more than they earned in April, even while they restricted spending on all but essential items like food, health, transport, and airtime.
Savings and loans: To cover the gap between decreased income and increased expenditures, the diarists drew on cash reserves kept at home, savings from local co-operatives and informal savings clubs, and loans from family and friends. Notably they were not able to withdraw from formal savings accounts held at microfinance institutions (over 60% of diarists hold such accounts) or take loans from MFIs during the month of April, as MFIs had closed down.
The April summary concludes on an optimistic note, describing ways this community has been able to cope with the emergency through “common sense measures” like restricting non-essential spending, and relying on existing relational capital—help from their neighbors for gifts of food and informal loans. But the note also leaves the reader with the sense that we are seeing a community on the brink—having resourcefully managed through the very lean month of April, but with precious few resources remaining to cope with further economic consequences of the pandemic, which may still be on the horizon for months to come.
Whatever the next few months holds, the financial diaries collected in Hrishipara (and in communities from Colombia to Kenya to Ethiopia to Indonesia) will provide a window into the difficult decisions and trade-offs that people will have to make every day, and should inform the policies and interventions that aim to lend them a helping hand.
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The Hrishipara Diaries project wishes to acknowledge funding from L-IFT.