Loan Seasonality

Not surprisingly, both CRS and Floresta found that loan cycles are closely tied into key activities in  communities throughout the year.  For instance, agriculture loans increase during the planting season, education loans increase when children go back to school and household food loans increase during the hungry season between planting and harvest time.  More details on the results from CRS and Floresta can be found below.

Sierra Leone Results

The graph above provides information about the seasonality of different loans types in Sierra Leone. In Sierra Leone, the hungry season starts in July and ends in September. During this period, the food basket for most households is depleted and quantities of rice available in households at this time of the year are drastically low. Four main activities simultaneously occur in this period:

  1. Planting for the next agricultural season
  2. Household food reserves are at their lowest
  3. High food prices
  4. Parents are preparing for the start of the school/college year
  • Agriculture Loans: Agriculture loans increase between May and July, peaking in July. This is the planting season for rice, as when cocoa farms are prepared. The loans are often taken for rice seed and/or labor.
  • Household Food Loans: The graph above shows that household food loans gradually increase in June and July, followed by a drastic increase in August. August is considered the peak of the hungry season, when poor families often live on wild plants and reduce the number of meals per day. In September, early rice varieties are harvested in upland rice farms, which results in the decrease of borrowers. This trend is maintained through November. In December, the number of household loans increase, possibly as a result of the Christmas season. January shows another slight increase in the number of household food loans taken out, due to initiation ceremonies into adulthood for young boys and girls that typically take place during this month.  These initiations often require additional food for participants and guests. Swamps are harvested in January and food baskets are replenished once again, hence the gradual drop in the number of loans in subsequent months.
  • Education: Education loans peak between August and October. This is the period when parents enroll their children in school, pay school fees, and buy uniforms and other school materials.
  • Business: Business loans are fairly consistent throughout the year. There is a small peak between August and October when people take out loans to buy agriculture products (e.g. palm oil or rice) to sell in the local markets.

Tanzania Results

The graph above provides information about the seasonality of different loans types in Tanzania. Generally, there are three main seasonal loan patterns: (1) January to March, (2) April to June, and (3) July to September. Although there is technically no designated hungry season in Tanzania, household economic hardship is typically the most prevalent from April to June. This is due to a number of events that occur in the January to March period including holiday celebrations, the beginning of new school terms (and payment of school fees) in January, and slow sales for businesses. By April, group members have spent much of their disposable income on previous quarter activities and need additional funding to make it until harvest time. Thus, business, agriculture, and education loans increase during this vulnerable period.

Harvesting of maize begins around July and continues into September. A majority of VSLA members do not take loans at this time since they can utilize their savings to purchase food and other household items.

  • Agriculture Loans: Agriculture loans increase between February and May, and peak in June. The planting season for maize and beans in the lowlands starts in January while in the highlands it starts in June. Farmers often need agricultural loans for weeding, pesticides, insecticides and harvest preparation.
  • Education: Education loans peak between January and June, when parents enroll children in school and are required to pay school fees, uniforms, and other school materials.
  • Business: Business loans peak between April and June, when people need to buy agriculture inputs. Another peak occurs in July, when individuals take loans to purchase agricultural harvests (typically maize and beans) to sell in the local markets.

Floresta does not collect information on household food loans.

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