Across the village Rahman, after failing as a self-employed mason, found someone willing to sell him a battery-powered rickshaw on a pay-as-you-go basis. He earns about 900 taka a day from driving all hours and pays off the debt at 350 a day. Our records show him paying consistently, and within a few weeks he had taken on a second similar rickshaw, this time paying back 400 a day. These days, he drives the second (newer) machine, and rents out the first one. Once the debts are paid off his income will be in the order of four times what it was before he started.
Why doesn’t Ranjit emulate Rahman? First, he says, he has nowhere at home to store the machine and nowhere to charge the battery (he pays to store his rickshaw overnight). Second, battery-powered rickshaws are expensive, so any damage or loss would be serious. Third, they need maintenance and batteries are liable to fail. These are valid concerns, but Rahman was able to overcome them, so why couldn’t Ranjit do the same? A likely reason is that Ranjit has a second occupation as a drummer in the village band, a side-line in terms of working hours but which makes him good money during the festival season. He has become more religious during the years we have known him, and his drumming is an important part of his spiritual life. He also asks ‘what would I do with an expensive rickshaw during the couple of months each year when I’m busy drumming?’ He admits he has a problem with declining rickshaw income but waves it aside with vague ambitions to change occupations at some unknown future date.
Within our diarist sample, households with micro-enterprises generally earn more than those mostly dependent on unskilled labour. That’s an answer to Ozler’s first question.
As for the second question, there are indeed those who neglect opportunities to shift up into micro-enterprise, and there are micro-enterprise owners content to let their businesses stagnate, or even to downsize to an unskilled occupation. Their reasons have to do with business opportunities, personal attributes, and social pressure. Under opportunities, finance, often thought to be critical, seems less of a constraint to expansion than day-to-day business issues like managing assets, staff, debt collection, and, to some extent, competition. Social norms can constrain: Kamrul forbade his wife to open a shop, and Rameza shocked her sons when she said she wanted to go abroad. Personal attributes like ambition, self-confidence, determination and openness to risk play a big role. Family relationships and even spirituality count. Education, in these samples at least, plays only a small part in answering Ozler’s puzzle: shrewdness may be more important than schooling.
If the answers to the Ozler puzzle lie in vaguely-defined ‘business issues’, ‘personality traits’, ‘social norms’ and the like, does that make our conclusions vacuous? Couldn’t we have assumed such factors a priori? Perhaps. But watching them play out in real cases that have been closely watched, day-by-day, for as much as three and a half years, transforms them from working assumptions into observed data. That is an advantage of the daily financial diary approach.
Stuart Rutherford and Rahul Chatterjee,
Hrishipara, Bangladesh, January 2019
Edited by Robin Gravesteijn, Idowu Ebuoma
- Ozler, B. (2018, Oct ). Cash grants and poverty reduction.
- UNCDF (2018 September). Landscape Assessment of Retail Micro-merchants in Bangladesh, written by Andrews, A. K. and Z. Aligishiev