Sustainability challenges of matching grant-funded enterprises: Qualitative perspectives from smallholder farmers and implementers

David Banda; Austin Mwange

doi:10.51867/AQSSR.3.1.22

Authors

David Banda The University of Zambia, Zambia Author https://orcid.org/0009-0009-6625-7275
Austin Mwange The University of Zambia, Zambia Author https://orcid.org/0000-0001-8568-3063

DOI:

https://doi.org/10.51867/AQSSR.3.1.22

Keywords:

Agricultural Development, Enterprise Sustainability, Matching Grants, Project Failure, Rural livelihoods

Abstract

Despite substantial investment in matching grant programmes to promote rural enterprise development, many funded farming enterprises fail to remain sustainable beyond the funding period. This study examines the reasons why some farming enterprises funded through matching grants fail to remain sustainable in Chipili District, Zambia. The study seeks to answer the question: what challenges prevent matching grant-funded farming enterprises from succeeding in the long term? The research is guided by principal-agent theory, the sustainable livelihoods framework, and institutional theory. The target population were beneficiary farmers of the Matching Grant Facility of Chipili District and the government officers. The research design employed was qualitative, and a total of nineteen (19) participants participated in semi-structured interviews and three (3) focus group discussions, who were sampled in a purposive manner. Thematic analysis was used to analyse data in order to establish common trends that affect the sustainability of a farming enterprise. The results indicate that matching grants assisted others to initiate and grow their businesses; however, most of the projects did not survive, owing to a number of challenges. These included poor access to markets, lack of certified seed, weak exit strategies, and delays in administrative procedures. Other challenges were low financial literacy, inadequate training, limited access to additional finance, poor stakeholder involvement, weak leadership, and conflicts within farmer groups. The study concludes that providing funds alone is not enough to ensure the success of farming enterprises. Based on the findings, the study recommendations are continued capacity building, stronger institutional support, and clear exit strategies to improve the sustainability of matching grant-funded enterprises. The findings are useful for policymakers and development practitioners involved in the design and implementation of matching grant programmes aimed at supporting sustainable rural livelihoods.

References

Adesida, I., & Okunlola, J. (2015). Effects of community participation on the sustainability of rural infrastructure in Ondo State, Nigeria. Asian Journal of Agricultural Extension, Economics & Sociology, 7(1), 1-9. https://doi.org/https://doi.org/10.9734/AJAEES/2015/15756 DOI: https://doi.org/10.9734/AJAEES/2015/15756

Ajayi, O. O., Toromade, A. S., & Ayeni, O. (2024). Climate-Smart Agricultural Finance (CSAF): A model for sustainable investments in agriculture. World Journal of Advanced Research and Reviews, 24(02), 001-011. https://doi.org/https://doi.org/10.30574/wjarr.2024.24.2.3291 DOI: https://doi.org/10.30574/wjarr.2024.24.2.3291

Amukoa, S. (2023). Characterizing and modelling of a matching grant for financing agribusiness innovation in Eastern Africa; a case of Bioinnovate Africa [Master's Thesis, Egerton University].

Antwi-Agyei, P., & Stringer, L. C. (2021). Improving the effectiveness of agricultural extension services in supporting farmers to adapt to climate change: Insights from northeastern Ghana. Climate Risk Management, 32, 100304. https://doi.org/https://doi.org/10.1016/j.crm.2021.100304 DOI: https://doi.org/10.1016/j.crm.2021.100304

Braun, V., & Clarke, V. (2022). Conceptual and design thinking for thematic analysis. Qualitative psychology, 9(1), 3. https://doi.org/https://psycnet.apa.org/doi/10.1037/qup0000196 DOI: https://doi.org/10.1037/qup0000196

Burki, A. A. (2015). Group-based BDS matching grants and farm-level outcomes in Pakistan. Journal of Development Effectiveness, 7(1), 43-63. https://doi.org/10.1080/19439342.2014.959033 DOI: https://doi.org/10.1080/19439342.2014.959033

Campos, F., Coville, A., Fernandes, A. M., Goldstein, M., & McKenzie, D. (2014). Learning from the experiments that never happened: Lessons from trying to conduct randomized evaluations of matching grant programs in Africa. Journal of the Japanese and International Economies, 33, 4-24. https://doi.org/10.1016/j.jjie.2013.12.007 DOI: https://doi.org/10.1016/j.jjie.2013.12.007

Chavula, P., & Yali, S. (2022). Description of Agricultural Extension and Advisory Service System in Zambia. International Journal of Academic and Applied Research(6(10)), 177-183. http://ijeais.org/wp-content/uploads/2022/10/IJAAR221028.pdf

Debebe, S. (2022). Post-harvest losses of crops and its determinants in Ethiopia: tobit model analysis. Agriculture & food security, 11(1), 1-8. https://doi.org/10.1186/s40066-022-00357-6 DOI: https://doi.org/10.1186/s40066-022-00357-6

Eidt, C. M., Pant, L. P., & Hickey, G. M. (2020). Platform, participation, and power: How dominant and minority stakeholders shape agricultural innovation. Sustainability, 12(2), 461. https://doi.org/10.3390/su12020461 DOI: https://doi.org/10.3390/su12020461

Ezeudu, T. S., & Obimbua, E. N. (2024). Enhancing rural market access and value chain integration for sustainable agricultural development in Nigeria: A study of constraints, strategies, and implications. International Journal of Research and Innovation in Social Science, 8(3), 528-550.

https://doi.org/10.47772/IJRISS.2024.803039 DOI: https://doi.org/10.47772/IJRISS.2024.803039

Fallas Conejo, D., & Sánchez, M. (2024). Leveraging remittance-based matching grants for investing in agribusiness development. https://doi.org/10.4060/cd2427en DOI: https://doi.org/10.4060/cd2427en

Greer, L. L., & Chu, C. (2020). Power struggles: when and why the benefits of power for individuals paradoxically harm groups. Current Opinion in Psychology, 33, 162-166. https://doi.org/https://psycnet.apa.org/doi/10.1016/j.copsyc.2019.07.040 DOI: https://doi.org/10.1016/j.copsyc.2019.07.040

Hossain, M., Mabiso, A., & Garbero, A. (2022). Matching grants and economic activities among horticultural entrepreneurs: Long-term evidence from Rwanda. World Development, 150, 105712. https://doi.org/10.1016/j.worlddev.2021.105712 DOI: https://doi.org/10.1016/j.worlddev.2021.105712

Jung, S., & Hajjar, R. (2023). The livelihood impacts of transnational aid for climate change mitigation: Evidence from Ghana. Forest Policy and Economics, 155, 103053. https://doi.org/https://doi.org/10.1016/j.forpol.2023.103053 DOI: https://doi.org/10.1016/j.forpol.2023.103053

Kolavalli, S., Agandin, J., Ampofo, A., Kemeze, F., & Amewu, S. (2020). Value chain development to benefit smallholders in Ghana: The effectiveness of selected interventions (51). (GSSP Working Paper, Issue. https://ideas.repec.org/p/fpr/gsspwp/51.html

https://doi.org/10.2499/p15738coll2.133661 DOI: https://doi.org/10.2499/p15738coll2.133661

Kujala, P. (2019). Maaseutuhallinnon arjen todellisuus-puhetta byrokraattisuudesta. Hallinnon tutkimus, 38(1), 6-20. https://doi.org/https://doi.org/10.37450/ht.96096 DOI: https://doi.org/10.37450/ht.96096

Lee, H. (2017). Exit strategy for aid programs: planning exit before entering. Int'l J. Soc. Sci. Stud., 5, 22.

https://doi.org/10.11114/ijsss.v5i7.2427 DOI: https://doi.org/10.11114/ijsss.v5i7.2427

Mabiso, A., Hossain, M. M., & Toguem, H. R. (2020). Smallholder Agriculture Development Project (SADP): Research and impact report. https://www.ifad.org/ifad-impact-assessment-report-2021/assets/pdf/impact/Lesotho/BAR_LESOTHO_RI_REPORT.pdf

Magessa, K. (2020). Exploring the mismatch between policy objectives and outcomes in Participatory Forest Management in Tanzania Bangor University (United Kingdom)]. https://pure.bangor.ac.uk/ws/portalfiles/portal/34988496/Magessa_thesis_20202020MagessaKPhD.pdf

Maina, C. W., Gichohi, P. M., & Kanyiri, A. (2024). Market Linkages and Growth of Small and Medium Enterprises: Insights from County Government Support Programs. Journal of Strategic Management, 4(3), 1-12. https://doi.org/https://doi.org/10.70619/vol4iss3pp1-12 DOI: https://doi.org/10.70619/vol4iss3pp1-12

Mainza, N. O., & Hachinene, C. K. (2024). Challenges Faced by Start-up Entrepreneurs in Agriculture Sector to Access Finance: A Case of Agro-dealers in Zambia's Central Province. Humanities and Social Sciences, 12(6), 202-209. https://doi.org/https://doi.org/10.11648/j.hss.20241206.13 DOI: https://doi.org/10.11648/j.hss.20241206.13

McKenzie, D., Assaf, N., & Cusolito, A. P. (2017). The additionality impact of a matching grant programme for small firms: experimental evidence from Yemen. Journal of Development Effectiveness, 9(1), 1-14. https://doi.org/https://doi.org/10.1080/19439342.2016.1231703 DOI: https://doi.org/10.1080/19439342.2016.1231703

Msangi, H. A., Waized, B., Ndyetabula, D. W., & Manyong, V. M. (2024). Promoting youth engagement in agriculture through land titling programs: Evidence from Tanzania. Heliyon, 10(7), e29074. https://www.cell.com/heliyon/fulltext/S2405-8440(24)05105-3

https://doi.org/10.1016/j.heliyon.2024.e29074 DOI: https://doi.org/10.1016/j.heliyon.2024.e29074

Mundia, M., Nkonde, C., Simui, F., Mufalali, M. S., & Muduli, R. (2023). Cooperatives and Livelihood Improvement: Understanding the Contribution of Enterprising Agriculture Cooperatives in Rural Communities of Kabwe District, Zambia. European Journal of Agriculture and Food Sciences, 5(2), 40-46. https://doi.org/https://doi.org/10.24018/ejfood.2023.5.2.655 DOI: https://doi.org/10.24018/ejfood.2023.5.2.655

Muteti, K., Wambua, S., Gichangi, A., & Mutua, M. (2022). The Household Income Determinants Crop Sales: The Case of Common Bean Production and Marketing in Selected Bean Corridors in Kenya. African Journal of Rural Development, 7(3), 399-411. https://doi.org/https://afjrdev.org/index.php/jos/article/view/351

Naidoo, I. A., & Khan, M. (2024). Project cluster evaluation on rural finance in the East and Southern Africa Region [Evaluation Report]. IFAD. https://ioe.ifad.org/en/w/project-cluster-evaluation-on-rural-finance-in-the-east-and-southern-africa-region

Namaswa, A., & Juma, D. (2019). Effects of bureaucracy on disbursement of development funds in county governments in Kenya. The Strategic Journal of Business & Change Management, 6(2), 2079-2087. https://doi.org/https://dx.doi.org/10.61426/sjbcm.v6i2.1240 DOI: https://doi.org/10.61426/sjbcm.v6i2.1240

Natarajan, N., Newsham, A., Rigg, J., & Suhardiman, D. (2022). A sustainable livelihoods framework for the 21st century. World Development, 155, 105898. https://doi.org/https://doi.org/10.1016/j.worlddev.2022.105898 DOI: https://doi.org/10.1016/j.worlddev.2022.105898

Ndombi, C. L., Kycilo, D. N., & Mutwa, A. S. (2020). Enhancing sustainability of donor funded livelihood projects in Kilifi County through effective monitoring and evaluation. International Journal of Research in Business and Social Science, 9(6), 168-182. https://doi.org/https://doi.org/10.20525/ijrbs.v9i6.880 DOI: https://doi.org/10.20525/ijrbs.v9i6.880

Okrah Maku, J. (2024). Challenges faced by Ghanaian female peasants in accessing farm credit: A study in the Mion District International Institute of Social Studies, Erasmus Universit]. https://thesis.eur.nl/pub/75692/ISS_AFES_RP_2023-24_Okrah-Maku-Juliet.pdf

Ola, O., Menapace, L., Benjamin, E., & Lang, H. (2019). Determinants of the environmental conservation and poverty alleviation objectives of Payments for Ecosystem Services (PES) programs. Ecosystem services, 35, 52-66. https://doi.org/10.1016/j.ecoser.2018.10.011 DOI: https://doi.org/10.1016/j.ecoser.2018.10.011

Risi, D., Vigneau, L., Bohn, S., & Wickert, C. (2023). Institutional theory‐based research on corporate social responsibility: Bringing values back in. International Journal of Management Reviews, 25(1), 3-23. https://doi.org/https://doi.org/10.1111/ijmr.12299 DOI: https://doi.org/10.1111/ijmr.12299

Sberro-Kessler, R. (2019). How Can Matching Grants in Agriculture Facilitate Access to Finance (118284). (Lessons Learned from World Bank Group's Experience, Issue. W. Bank. https://hdl.handle.net/10986/33829 DOI: https://doi.org/10.1596/33829

Scoones, I. (2015). Sustainable livelihoods and rural development. Practical Action Publishing. https://doi.org/10.3362/9781780448749 DOI: https://doi.org/10.3362/9781780448749

Shah, A. (2020). Evaluating the Conditionality of External Development Assistance Programs. In A. o. S. Shah, A.) (Ed.), Policy, Program and Project Evaluation: A Toolkit for Economic Analysis in a Changing World (pp. 333-399). Palgrave Macmillan. https://doi.org/10.1007/978-3-030-48567-2_10 DOI: https://doi.org/10.1007/978-3-030-48567-2_10

St-Jean, É., & Tremblay, M. (2020). Mentoring for entrepreneurs: A boost or a crutch? Long-term effect of mentoring on self-efficacy. International Small Business Journal, 38(5), 424-448. https://doi.org/https://doi.org/10.1177/0266242619901058 DOI: https://doi.org/10.1177/0266242619901058

Steinke, J., Ortiz-Crespo, B., van Etten, J., & Müller, A. (2022). Participatory design of digital innovation in agricultural research-for-development: insights from practice. Agricultural Systems, 195, 103313. https://doi.org/https://doi.org/10.1016/j.agsy.2021.103313 DOI: https://doi.org/10.1016/j.agsy.2021.103313

Ullah, A., Verner, V., Madaki, M. Y., Adams, F., & Bavorova, M. (2024). Factors Influencing Informal Credit Access and Utilization among Smallholder Farmers: Insights from Mountainous Regions of Pakistan. Agriculture, 14(10), 1764. https://doi.org/https://doi.org/10.3390/agriculture14101764 DOI: https://doi.org/10.3390/agriculture14101764

WorldBank. (2016). How to Make Grants a Better Match for Private Sector Development. https://openknowledge.worldbank.org/handle/10986/24736