Financial Access Initiative (FAI) Launches Research Study to Shed Light on Hidden Lives of Small Firms

The Financial Access Initiative (FAI), together with The Mastercard Center for Inclusive Growth announced the launch of The Small Firm Diaries, a global research initiative that will provide unprecedented insight into the financial lives of small businesses across six countries in Sub-Saharan Africa, Latin America, Southeast Asia, and the Pacific. The study will examine how small firms manage the adoption of digital financial services, with a focus on women-led businesses.

By collecting detailed quantitative and qualitative data from firms employing between 1 and 20 non-family workers in Nigeria, Ethiopia, Uganda, Colombia, Indonesia and Fiji, the study will shed light on how small business owners across the world manage their financial decision making amidst uncertain and volatile economies. While there has been a great deal of research on informal family-run “microenterprises,” and more professionalized “medium-sized” firms, the needs of small firms are not yet well-understood. This research initiative aims to provide financial service providers, policymakers, and practitioners with knowledge and recommendations to better understand the unique challenges and needs of small firm owners.

“Small firms are by far the biggest employer in low and middle-income economies. Despite decades of statistical research, fundamental questions remain about why some grow, and some stagnate,” said Jonathan Morduch, Professor of Public Policy and Economics at NYU Wagner and Executive Director of the Financial Access Initiative. “Our aim is to go into the field and try to understand small firms from the bottom-up, by listening closely to how entrepreneurs and workers make choices on their own terms.” 

The Mastercard Center for Inclusive Growth provided the first, catalytic investment in this project; the Small Firm Diaries has also received funding from the Bill & Melinda Gates Foundation, the Argidius Foundation, the Aspen Network of Development Entrepreneurs, and UNESCAP. 

FAI and its partners are working with local organizations to obtain country-level research and ethics approvals in each of the six countries that will host the study.

Methodology of The Small Firm Diaries Research Initiative

Project researchers will follow a group of up to 150 businesses across multiple sites in each country over a period of 12 months, visiting them several times per month to collect quantitative data on cash flows, and qualitative data on business owners’ aspirations and decision-making. 

Compared to traditional research studies that produce static snapshots from a single point in time, financial diaries can produce nuanced and dynamic portraits of firm owners and their choices. High-frequency, quantitative data on cash flows shows researchers actual trade-offs and decisions made, and qualitative data collection allows them to probe deeply to understand the “why” behind those choices.

“Just as household financial diaries have been crucial to understanding the needs of low-income households around the world, and the barriers to achieving household financial security, the kind of detailed financial information provided by diaries is needed to understand the choices that small firm owners make and the real barriers to growth they face,” said Timothy Ogden, FAI’s Managing Director. 

To learn more about the project and to subscribe to research updates, go to .