Volatility and resilience: Lessons from the corner shop diaries research in Nigeria

Volatility and resilience: Lessons from the corner shop diaries research in Nigeria

Adaeze Degreat[1], a middle-aged mother of two, works in a local teaching hospital  in Southern Nigeria and runs a supermarket that sells groceries and daily provisions. A steady income from her salary and a variable income from her shop keeps Adaeze’s household finances mostly manageable. That is, until COVID-19 hit Nigeria. The disease was first reported in the country on 27th February, 2020. By April, several states in the country were under a complete lockdown, barring essential service providers, such as medical facilities and grocery shops.

The virus struck communities and upended people’s lives in an unprecedented way, affecting their economy in particular. Different states implemented lockdowns during March-June, 2020. The baseline data of the National Longitudinal Phone Survey, which was collected in April-May, 2020, indicates that 35-59% of the households that needed staple food could not purchase it, 26% of the households could not access medical treatment, and the income of 79% households decreased.

As highlighted in this report by FATE Foundation, the pandemic had a severe impact on MSMEs. 94% of MSMEs reported being negatively impacted by the pandemic—particularly in the areas of cash flow (72%), sales (68%), and revenue (59%). However, corner shops, which are small neighborhood shops that sell daily need items were allowed to operate during the lockdowns and they served as the sole lifeline for local people.

L-IFT had been running a Financial Diaries research exercise in Nigeria since 2019. In that sample, we identified five corner shops and later included a sixth shop in April, 2020 for the global Corner Shop Diaries research. All these corner shops are located in the Edo State in Southern Nigeria. By the end of March, Edo State had started lockdown measures by limiting public gatherings to 20 people. By mid-April, a full lockdown was in effect, backed by containment strategies, such as closures of all interstate borders.

Using the daily financial transaction data from the diaries, our blog provides key insights about the financial life of corner shops and the impact of COVID-19 on them.

1. The COVID-19 pandemic had a severe impact on the income of corner shops, which was already volatile

The five corner shops in our pre-COVID sample vary in terms of the businesses they operate but all display similar volatility in income. Three corner shops sell groceries and daily provisions, one is a crayfish business, and one is a digital services shop. Examining the trends in the income of these shops in 2020 (Graph 1) highlights the volatility.

For five out of the 10 months, the combined monthly income for the five corner shops was more than 25% below their overall average monthly income—we can call these dips. The monthly income for three months was 25% more than the average monthly income—we can call these spikes.

We also see how external factors, as well as business-specific nuances, can affect income. The crayfish business, which started in January, 2020 has been very profitable and has seen big cash flows in regular intervals. The spike in July is mostly due to one such big cash flow. The second spike in October a result of panic buying by people as they feared a shortage of items caused by the END SARS[2] people’s protest.

Graph 1

If we zoom in on the data from March to June in the early months of the pandemic, the impact of the lockdowns[3] is prominent. As we can see in Graph 1, during the lockdowns, that is, April-June 2020, the income of the corner shops was at its lowest point. The crayfish business, which performed well during some stages of the lockdown, created the combined income spike in July 2020. Graph 2 highlights that the other businesses did not reach their pre-COVID level yet and even the panic buying during the END SARS protests in October did little to help them.

Graph 2

2. Depending on additional income sources, rationalizing expenses, and withdrawing savings were key survival strategies for corner shops during the pandemic

The COVID-19 pandemic emphasized the importance of multiple sources of income for a household. We saw that our respondents either picked up additional sources of income or started to depend more on their secondary sources of income. One of the respondents, who holds a salaried job, happened to have started the lucrative crayfish business just before the pandemic in January, 2020. She is the highest earner in terms of overall income among the corner shop diarists.

The respondent started this business after realizing her fixed employment was no longer enough to survive. This proved lucky for her. During the lockdown, which limited operating times at her workplace, shifts were implemented. Meanwhile, her salary began to diminish. She also offered crayfish deliveries during the lockdown, since she owns a car. Through this venture, she could reach more customers quickly and provide a convenient solution for them, who stayed at home to avoid COVID-19. The income from this crayfish business helped her to manage her finances at the peak of the pandemic.

Graph 3

The expenses of the corner shop owners (Graph 3) helps us understand some of the coping strategies they adopted and how their expenses changed during the pandemic. We can see an increase in expenses on food in March, which can be attributed to pre-lockdown panic buying of essentials. We then see a drop in April, when the lockdown was in full swing, and then a rise in May as lockdowns eased up. This gradually came back to the pre-COVID levels by September-October.

Understandably, we see a drop in religious expenses in April – May. This was the time during or just after the lockdowns and mosques and churches were closed. Although the lockdown eased slightly from May, the post-lockdown era came with its own new set of regulations with bans on religious and social gatherings still in place. However, around October, religious expenses seemed to have exceeded pre-COVID-19 levels.

Owing to the lockdowns, when nobody was permitted to travel, transport costs dipped during March. The month of May saw the gradual easing of lockdown restrictions, which allowed people to move and work again. Hence, we see a sharp increase in transport costs followed by a gradual stabilization and then further increases with further easing of the lockdown.

The cost of toiletries rose just after the lockdown (see the spike in May) as personal hygiene measures were a priority for most. Since toiletries, such as soaps and sanitizer were important for COVID-19 prevention and care, some shops bought and hoarded them in anticipation of their demand. However, during the June to August period, we see toiletry expenses dropping as a result of lower demand and an expectation for them to return to pre-COVID-19 levels.

The pandemic also forced the diarists to withdraw significantly from their savings. Data from the five corner shops—excluding the one that joined in April, 2020— indicates that the total savings withdrawn by respondents increased significantly between April-October, 2020 compared to August 2019-February 2020. The respondents reported that they withdrew NGN 354,000 or USD 928 in April-October, which is 66% more than their withdrawals in August 2019-February 2020. The crayfish business and a supermarket contributed the most in this owing to the increase in demand and the subsequent need to restock.

3. The savings patterns of corner shop owners correlate with their income

Graph 4

We observed that income and savings are correlated (correlation coefficient=0.5). Graph 4, makes it evident that the pattern of people making savings deposits mostly mirrors their income patterns. The only exception is in March, 2020, the month when lockdown started. This dip in March is likely due to the limited amounts that could be saved during the start of the lockdowns as businesses and their individual households needed more funds to stock up adequately for the COVID-19 period. During this time of uncertainty, people may have also preferred to keep their money in cash, ready for use, instead of saving the money.

Closing remarks

The findings highlight the reality of income volatility and celebrate the resilience of micro-businesses and LMI segments. Many observers expect the business of corner shops to remain unharmed as they were allowed to operate during lockdowns. Yet this is clearly not the case. They faced significant drops in income and have only gradually started to recover. We also see how multiple sources of income are extremely helpful during times like the pandemic. Adaze, who we met at the beginning of this blog, received substantially less income from her salaried job and her business also suffered due to reduced customer footfall. However, she and her business, along with many others like her in Nigeria survived in the long run and have been gradually recovering from the shock. And we can credit a nuanced research approach like the Diaries method to have uncovered a better understanding of the path toward recovery.

[1] A pseudonym has been used to protect the privacy of the participant.

[2] SARS stands for Special Anti-Robbery Squad, a former police unit in Nigeria feared for brutality. END SARS was a movement that protested against this police brutality and demanded the unit to be disbanded.

[3] In Edo state, the initial lockdown measures were announced by the Governor in 24th March and by April, 2020, a full lockdown was in place. The lockdown was eased in phases from May to June.


Rahul Chatterjee


Mhlalisi Ncube


Anne Marie Van Swinderen


‘Surviving a pandemic’: Five key insights from the Corner Shop Diaries research in India and Indonesia

‘Surviving a pandemic’: Five key insights from the Corner Shop Diaries research in India and Indonesia

Ishwar Sharma, the only bread earner in his family, runs a small café in a town in northern India. Meanwhile, Alus, a mother of two, runs a small grocery store in Central Java, Indonesia.

The COVID-19 pandemic and the “economic pandemic” that followed have brought Ishwar and Alus to the same point. These misfortunes had hit the businesses of both micro-entrepreneurs badly.

In Ishwar’s case, people become reluctant to buy his food and beverage due to health concerns, as he prepares the items he sells onsite. His troubles were compounded by the prolonged closure of businesses during lockdowns, which translated to fewer customers, alongside new competition from the reverse-migration by people returning from the cities who set up small cafes in his neighborhood.

As for Alus, her customers—mostly local farmers—became cash-strapped due to the significant drop in crop prices. Furthermore, the prices for basic groceries have surged during the pandemic (for instance, the price for cooking oil jumped 33% higher), and Alus’ customers had to either limit their purchase or pay for their groceries later.

Both micro-entrepreneurs are, however, striving to keep their businesses afloat.

MSC’s research on the impact of COVID-19 on MSMEs in India indicates that 73% of the businesses surveyed had reported a decrease in customer footfall. Meanwhile, three-fourths of the enterprises reported a decline in income. Meanwhile in Indonesia, 79% of MSMEs surveyed reported a drop in sales volume by a median of 50%; and 51% reported that they kept operating as usual but the overall number of customers per day had decreased by a median of 50%.

From October, 2020, MSC started to track the daily financial life of 25 corner shops each from India and Indonesia using the Financial Diaries methodology. We have collaborated with the social enterprise Low-Income Financial Transformation (L-IFT), to track the daily financial transaction of corner shops. These corner shops are small retail businesses located in neighborhoods that sell daily needs products and provide essential services.

The daily financial data of these shops generate intriguing insights into how these corner shops are in the process of recovering from the COVID-19 pandemic and the challenges they face.

In this blog, we discuss five insights from the early data of this research.

1. In India, owners of the small daily provisions store have become risk-averse and restricted their ambition.[1]

Varun Singh, father of two teenagers, runs a small daily necessities store in the north-west part of India. He mentioned during the interviews that his monthly gross income was INR 15,000 (USD 206) per month before the pandemic, which dropped to INR 8,000 (USD 110) per month during the pandemic.

The data that we collected in the past two months of 2020 indicates that he is yet to attain his pre-COVID level of business (see Graph 1).

Graph 1

Varun has been running his small shop from home although he wanted to buy or rent a shop in the market area. Despite difficulties, he wanted to grow his business. Yet the financial and health-related risks related to the pandemic have convinced him to postpone his planned expansion and continue operating from the current location.

Many corner shop owners in our sample also think along similar lines. Even though customer footfall has returned to normal, they are buying less compared to pre-COVID-19 times. Hence even if the income of the shops has picked up gradually, is still not what it used to be.

The financial stress and the experience of losing near and dear ones have made the corner shop owners risk-averse.

2. In Indonesia, many corner shops managed to maintain their regular income during the pandemic. For some, the pandemic helped to increase revenue.[2]

Hening, a young mother of two, runs a corner shop in Central Java. She sells staple foods, cooking oil, snacks, sweets, tobacco and cigarette, medicine, gas, and toys. She could maintain her usual sales revenue even during the pandemic (an average of IDR 30 million or USD 2,146 per month). 

The data from the Diaries (Graph 2) indicates that Hening’s average monthly gross income is IDR 29 million (USD 2,074). It shows a drop in November, 2020 (Week 7) but only because Hening had to close her shop for around two weeks to help with some wedding events.

The revenue of Hening’s shop was soon back to normal—and even increasing—once she returned to the business (see Graph 2).

Hening has maintained her sales revenue during the pandemic by using some simple strategies. For instance, she stopped selling airtime as many of her customers often pretend they didn’t receive the top-up so they can refuse to pay –forcing Hening to cover the cost herself. As Indonesia did not restrict shop operational hours, Hening also kept her usual opening hours, that is, 6 am to 9 pm daily during the lockdowns. She also implemented hygiene protocols when the pandemic was at its peak by providing hand sanitizer outside the shop for customers’ use to make them feel safe.

Moreover, Hening has started to prepare better budgeting for her business and personal finance. She also uses her business data to map her income and expenses better and also allocated some money for saving.

Graph 2

Many corner shops in our sample adopted several simple strategies. These included following health protocols to make customers feel safe, prolonging operational hours to increase customer footfall, and reducing the number of staff members. The corner shops also adjusted their product or service mix to sell items in high demand or commanding a higher market price and stopped the sale of unprofitable or less-profitable items.

The strategies have helped corner shops to maintain their income or even make more profit than in earlier years.

3. Corner shop owners are beginning to think digital.[3]

In India, multiple corner shop owners, such as medicine shops, barbers, and cafés, among others, told us during interviews that they have started to accept digital payments, most commonly from PhonePe or Google Pay from clients during the pandemic. This phenomenon is mostly observed among younger diarists. We have also seen the use of messenger apps and social media to market products and services. Some diarists have also started to accept orders from regular customers through WhatsApp.

In Indonesia, we found multiple diarists using their WhatsApp and Facebook accounts to promote their business; mostly to generate awareness among customers about any new product or service they have started to sell. We also found that the micro-entrepreneurs use WhatsApp to communicate with suppliers. Some diarists use e-commerce sites, such as Shopee, Tokopedia, or Bukalapak to buy stocks at cheaper rates and sell specific products, such as plastic furniture. Only two of our diarists use digital payments to settle bills through ShopeePay, and pay suppliers and accept payments from customers through OVO and LinkAja. However, this had been their practice for a couple of years before the pandemic.

Many diarists were interested in using e-commerce in the future. Yet juggling between the brick-and-mortar shop and the online store requires time and energy. They also have concerns about the cost of internet data; hence they have become reluctant.

4. CICO agents in India saw increasing footfall but declining income during the lockdowns.

Our sample from India has three dedicated CICO agents and all of them mentioned that the pandemic has hit their businesses. These three CICO agents reported the total monthly net income of INR 38,000 (USD 521) before the pandemic, which fell by 24% to INR 29,000 (USD 398) during the pandemic.

The four major reasons for the decline in income are:

1. Reverse migration, which has decreased remittance;
2. Most withdrawals were small in value, which increased footfall but not income;
3. Worrying about cash crunch during lockdowns, many people withdrew their savings through the BC agents, thus creating liquidity issues for the agents;
4. Owing to mobility restrictions, agents could not travel to rebalance their liquidity, which also hampered the business.

Graph 3

However, the business has picked up now. Graph 3 shows the average monthly income of INR 40,108 (USD 550), which is similar to pre-COVID-19 times.

5. Women who own corner shops have faced unique challenges during the pandemic.

Social norms and caregiver responsibilities created an extra set of challenges for women who own corner shops. As traditional gender roles are still prevalent, we observed our women diarists struggle to manage their unpaid work at home and responsibilities at the shop.

One respondent from Indonesia mentioned that as schools are closed and children are at home, she struggled to manage her shop and the children. For another respondent, the extra pressure of earning for the household, since her husband lost his job, and fulfilling her duties as the caregiver made her life very stressful.

In India, a few women-owned enterprises reported that their husbands used to help them for tasks where mobility is required, such as withdrawing cash, repairing business assets, and buying supplies, among others. Yet the COVID-19 pandemic posed a challenge as their husbands had to work harder to earn money and could not help at their wife’s business.

To conclude, we highlight that financial conditions and the adoption of digital means are dynamic processes that change rapidly. One-off surveys can capture the situation at one point in time but fail to capture the transition and the volatility. Fortunately, the Corner Shop research can bridge this knowledge gap.

This blog is an introduction to the Corner Shop Diaries project, the first of a series that will be published regularly this year. We will also publish regular data-based insights on our website, and combine these insights with actionable recommendations for policymakers and practitioners.

This series will touch upon different themes, including the adoption of digital payments and e-commerce by micro-businesses, savings and loan products that they need, and their behavioral changes over time. Be sure to stay updated for more insights from us.

[1] 1 USD is equivalent to 73 INR

[2] 1 USD is equivalent to 13,980 IDR

[3] Findings from in-depth qualitative interviews with selected diarists in both the countries


Rahul Chatterjee


Anant Tiwari


Manoshij Banerjee

assistant manager

Rahmatika Febrianti

assistant manager

Ira Aprilianti

assistant manager

Yani Parasti Siregar


The reality of Covid-19 for a restaurant in Zimbabwe

The reality of Covid-19 for a restaurant in Zimbabwe

Many businesses in Zimbabwe have wondered how Covid-19 would affect their operations. Businesses have had to consider different scenarios that could happen because of lockdowns or in the event of Covid-19 infecting their employees. For corner shop ‘2547’ [1], both scenarios have become a reality that they have had to deal with.


When Covid-19 first struck in March 2020 the country went into a lockdown for more than 5 months with only essential services such as grocery shops, government operated transport services, health facilities, and water, sanitation, and energy services left operating while other businesses and informal trade were shut down. The lockdown began to ease in August where we saw the gradual reopening of the rest of the economy as non-essential services reopened, curfew times were extended, intercity movement reopened, resumption of school, resumption of flights, and reopening of informal markets. Just as we thought we had turned a corner; the virus flared up again. As from the end of November 2020, the number of local infections has gone up exponentially and in January 2021 a fresh lockdown was put in place. This graph below reflects the income changes over time and shows the gradual growth of income with lockdown easing and with the highest month being December during the Christmas holidays. Unfortunately, the new lockdown imposed on January 5, 2021 has been taking its toll with incomes dropping alarmingly.  


There has been an even more direct impact this time around which is illustrated by shop 2547. Shop 2547 is a restaurant that we have been tracking – amongst the 18 shops we are tracking in Zimbabwe – since April 2020. Before the second Covid-19 wave, business was beginning to stabilise from the calamitous effect of the previous lockdown. No sooner had the business recovered to profitable levels that it was hit again, this time very directly through the infection of one employee who tested positive on 30 November and has not been to work since as she has not fully recovered. This resulted in the loss of the businesses’ only till operator and a senior employee who had been with the family for many years. Due to her testing positive, the rest of the staff were tested as well, and two more employees tested positive and have undergone the mandatory days of self–isolation as from 7 to 22 December and are now negative and back at work. Effectively, the shop had lost a till operator, a cook and a butcher. For a small business as theirs, the loss could be felt. Even though other workers stepped up and took on more shifts, the restaurant still recorded a slight drop in income in December whereas other businesses in the study were making their highest incomes that month. 

This graph above illustrates how the restaurant’s December income has fallen instead of being the highest due to the Christmas holidays, which is the biggest holiday period in the country. In addition, the new lockdown in January has had a crushing effect on the business. Although the shop manager feels that they have not faced any stigma, since it is known within the town that there have been Covid-19 cases at the restaurant, this is still a concern as the stigma may not be openly shown. The shop manager expects thought that since the community is aware that they have tested everyone and followed proper procedures, they will still trust the restaurant. 


Outside of the Covid-19 infections, the shop has felt several other pinches with supply chains being disrupted due to new Covid-19 related regulations making it difficult to import cheaper raw materials from South Africa. For example, in making fresh chips, supplies such as potatoes and vinegar were cheaper to import from South Africa. One of the shops employees is asthmatic and finds it difficult to work with a face mask which means her productivity is affected. Additionally, the need for social distancing has also affected the number of tables that the business can pitch on the premises at any one time. Whereas in the pre-Covid-19 era the business could handle up to 60 customers at any one time, now it can only accommodate about a third to half of that at a time. However, even with those problems in place, the shop had managed to recover, and it seems that the most difficult times have been the hard lockdowns and Covid-19 infections. 


A review of some of the expenses show the spikes in September and October when business was beginning to pick up followed by significant drops in December to January with the Covid-19 infections and a new lockdown in place. These spikes in raw materials, food at home, and salaries are in reflection of the increased income being received during those few months while the spike in toiletries expenses in December does reflect the additional response by the restaurant to protect themselves and their customers through improved hygiene. As the salaries graph reflects, the small business was forced to reduce salary payments during the first lockdown which helped lighten their burden but was much harder for their staff. 


We continue to monitor the restaurant’s fortunes closely during this pandemic and hope that our findings can be both useful to the restaurant itself in its operations as well as to inform the larger public and policy makers of the impacts of the pandemic. We also hope that the findings will be useful to development strategies now and in the post Covid-19 era to bring businesses and communities to a normal again. 

[1] Each participant in our study has a numeric research ID which makes it possible to study an individual participant with full anonymity of the respondent guaranteed.


Mhlalisi Ncube

Manager (L-IFT)

Percy Ndlovu

Field Researcher (L-IFT)

Field Researcher Experience – The Corner shop diaries project

Field Researcher Experience – The Corner shop diaries project

My name is Sithokozile Moyo from the second largest city in Zimbabwe, Bulawayo. I hold a BA in Language and Communication studies from Lupane State University in Zimbabwe (graduated 2019). 

For a time since March 2020, Zimbabwe came to a standstill with the arrival of the COVID-19 pandemic. Businesses and people’s daily lives were heavily affected even to the small corner shops in our neighbourhoods. As the disaster was unfolding, one of my former internship supervisors, Mhlalisi Ncube, approached me about doing Covid-19 and livelihoods related research work with him and L-IFT. The idea was exciting given the continuing situation of the Covid-19 crisis. The idea of working from home doing interviews via phone calls was all new to me and different to research work I had undertaken before. Most of my participants were from Bulawayo while a few were from out of town in Lupane in a totally different province but one that I was somewhat familiar with as I had gone to University in the small town. 

I am a recent graduate and employment is hard to find in Zimbabwe so when this opportunity was presented to me, I was very happy. I had to approach small and big shops which were selected for us and explain to them about the research and conduct intake interviews with them. As I was moving around shops in my area some shops were not welcoming at all, some bluntly rejected me thinking I had a political motive. I eventually did a baseline survey of ten shops. From my ten in baseline, six were selected by the L-IFT team for me to proceed to work with. 

Sithokozile collecting data from one of the corner shops in the project
Sithokozile collecting data from one of the corner shops in the project

We were trained together with other field researchers in Zimbabwe via a WhatsApp meeting since it was in the middle of a pandemic and lockdown. It was a bit complicated because we were all used to face to face training. We eventually all got the hang of the app and our work commenced with our final respondents. During the first week of the research, I put on my mask and keeping the recommended distance, conducted the surveys in person and explained the kind of information that they were supposed to provide, and that in future we were going to hold the interviews via phone calls only. For the two respondents outside of Bulawayo, everything was all done via phone calls from the start. 

The participants of the research were to provide aspects of their business and personal lives such as their income, savings, expenditures, loans, and some other aspects that may take place during every week and I would input this into Finbit. The participants understood that the interviews are frequent and that the questions are the same all the time although they might be some changes in the future. Being with the participants for some time now has helped as they know me well and are expecting my phone calls and messages. We now treat our interviews as conversations where they tell me about how their week went, the income they got, the expenses they paid and how much the pandemic has affected their business and personal lives.

Sithokozile collecting data from one of the corner shops in the project
Sithokozile collecting data from one of the corner shops in the project

The most challenging task is that sometimes respondents can get impatient. The other problem I face is calling respondents and their phones not going through, this becomes a challenge because it sometimes takes considerable time to reach them. It was also hard to keep them interested in the project as they wanted to know what they were going to get out of it. We had been told not to promise anything as the research was only for learning and could be used for developing better policies for people throughout the world. However, it was good that in July 2020 all the shop respondents received brand new phones as a way for them to see Finbit for themselves on their phones and in the future use it themselves with little guidance from me. The phones were also a nice way to keep them engaged in the project. Every participant was beyond happy in receiving the brand-new boxed phones and were amazed by the good gesture. In that week and the coming weeks, my respondents have been very cooperative and even more attentive of my calls.  

 My experience has been good, and I am thankful to L-IFT for giving me the opportunity to be part of the research. I had to always exercise patience as some respondents were impolite and impatient. I had to be diligent with them and always probe further to get adequate answers. To me every day is a workday, I interview some respondents even during weekends. I have gained valuable experience and I have become more skillful in data collection and am happy to continue with this work. 


Sithokozile Moyo

Field Researcher (L-IFT)

CornerShop Podcasts


 By L-IFT and MSC
 Podcasts about financial diaries, financial inclusion, etc

CornerShop #1 - PRESENTATION

The CornerShop Diaries project is a multi-country year-long research project on small businesses that was started in April 2020 by L-IFT. In this episode, Anne Marie van Swinderen, L-IFT’s director, talks about the origin of the project.

CornerShop #2 - India & Indonesia

The CornerShop Diaries project is a multi-country year-long research project on small businesses that was started in April 2020 by L-IFT, in partnership with Microsave Consulting (MSC). In this episode, Rahul Chatterjee, Manager of the Data & Insights team at MSC talks about the collaboration between MSC and L-IFT, as well as the challenges of collecting data in COVID times.  

Getting behind the corona statistics: How a small shopkeeper took on the pandemic

Fifty-three-year-old Rezwan Kabir (name changed) is a former bus driver who had changed his profession after 20 years. It was 2007 and he felt he was growing too old to manage the grind of driving long distances. He opened a small daily provisions shop in a village market in central Bangladesh. The business gradually picked up and prospered—until COVID-19 struck Bangladesh.

Rezwan struggled with several challenges like supply issues, falling customer footfall, lockdowns, increased price of items, and the constant fear of infection. His income shrank and he had to withdraw most of his savings and put his plans to grow his business on hold indefinitely. Rezwan’s case is just one among the millions of micro, small, and medium enterprises (MSMEs) that faced unprecedented challenges during the pandemic. Many were closed permanently or forced to change their business, as losses piled up.

What surveys told us about the impact of the pandemic on MSMEs in Bangladesh

We examined two surveys conducted during the pandemic—MSC’s study of 90 MSMEs conducted in May, 2020 and International Finance Corporation’s (IFC) study of 500 MSMEs in June, 2020.[1] The IFC survey covered a wide range of MSME types, including farm based and non-farm enterprises  , wholesalers,  retailers etc. The MSC survey sample included a smaller proportion of manufacturing businesses and focused on shops and services. The MSC study found that customer footfall had decreased for 94% of MSMEs in Bangladesh and sales had fallen for 85% of MSMEs. The pandemic had an impact on the supply chain too: 74% reported decreases in the volume, while 58% reported decreases in the value of supplies. 38% reported that suppliers had stopped offering credit and 28% revealed that they were offering less credit than before. The nationwide lockdown was in effect from 26th March, to 31st May, 2020. The survey was done when the lockdown was still in force and therefore captured the situation at its most severe. The IFC dataset indicates that 83% of firms were making losses and 21% of them had closed temporarily, either by choice or by government mandate. 91% of the firms suffered from decreased cash flow, averaging around 52%. 67% of the firms were affected by shocks like a reduction in hours worked, reduction in demand, and unavailability of financial services. The survey was done in June, after the lockdown was lifted when economic activity had started to recover.[2] These one-off surveys revealed the situation of the MSMEs at specific points in time. However, we needed to go behind the survey data to understand how the business owners survived the pandemic and know if have they started to recover, among other developments. To answer these questions, we can turn to other research methodologies like the Financial Diaries. The insights that we get from the data in the daily diaries can give us a more nuanced perspective than those derived from a one-off survey.

Arshad’s story: resourcefulness, resilience, and innovation

For the past five years, the Hrishipara Daily Financial Diaries project[3] has used the diary-based research to track 60 low-income households in Hrishipara, a village on the outskirts of a market town in central Bangladesh. In mid-2020, the project added to the sample five corner shops, which are stores for daily provisions. Here, we discuss the case of one such corner shop to understand its situation during the peak of the pandemic and assess if it has managed to recover. The store is owned by Arshad (name changed), who, along with four other corner shop owners, has been volunteering as a “diarist” since the third week of July, 2020.

                                                                                                                                      Arshad in this shop

In our first interview with him, Arshad told us he sells grocery items, cosmetics, and airtime from a shop that he owns and has been running for nine years. His shop is comparatively larger than other shops in his area and is situated in a prominent business location. Arshad estimated his weekly average gross income, that is, sales revenue before COVID-19 at BDT 210,000 (USD 2,483).[4]

He told us that his gross income started to decrease when the lockdown was imposed in late March. It reduced to an average of BDT 60,000-70,000 (USD 709-828) a week. This continued for two months and from June onward, Arshad’s gross income slowly started to climb back up but did not return to pre-COVID levels. During the peak of the pandemic between March to June, 2020, he would open his shop early in the morning when mobility was less strictly regulated by the authorities. Customers could come to his shop to buy their daily needs in these early hours and the arrangement worked for both parties.

In Graph 1, we see that the weekly gross income in the first week of data collection was BDT 88,400 (USD 1,045) and the highest income was in the second week of December at BDT 207,000 (USD 2,447). The average weekly gross income throughout the period of data collection was BDT 157,805 (USD 1,866), which was still just 75% of the reported average weekly gross income in the time before COVID-19. The data suggests that sales are slowly getting back on track and the recovery process has started.


However, has he been making a profit? Arshad reported that before COVID-19, his weekly net income was in the range of BDT 14,000-15,000 (USD 165-177). After COVID-19 struck Bangladesh, in the first three months (March to June 2020) he told us that his weekly net income shrank to the range of BDT 6,000-7000 (USD 71-83). 

But what do the diaries say? Graph 2 depicts his weekly income, business expenses, and net income. Surprisingly, in more than half of the weeks (12 out of 22 weeks) during data collection, the net income of the week was negative—that is, the business expenses exceeded sales.

When we asked Arshad about these losses, we got an interesting reply. He revealed that he does not track his weekly income and expenses carefully and was not aware that he was incurring losses in many weeks. Before the diaries started, he did not keep detailed records of income and expenses. Even now, he records these details for the project but does not use them to plan his business.

Instead, Arshad tries to lower his business expenses by buying stock before prices go up. As a result, he makes losses in those weeks when he buys stock in bulk. Arshad is not worried about making profits some weeks and losses in other weeks. “This is all part of the game and things will be alright in long run”, he notes, smiling.

How did he manage his household expenses in these tough times? Like many low-income households, Arshad has more than one stream of income. His wife is a government high school teacher, and her income takes care of some of the family expenses. Arshad’s household is part of a joint family—he lives with his elder brother’s family. One of his nephews works in Singapore and the remittances he sends helped the household during the peak time of COVID-19 and even now.

Arshad was fortunate that his household had several regular sources of income, unaffected by the pandemic. This reemphasizes the importance of regular guaranteed income in situations like COVID-19—be it through a secure job or direct cash transfer. Fortunately, both the Government of Bangladesh and BRAC, the largest NGO in Bangladesh, ran cash transfer programs for the poor in the country and these programs helped millions of households to survive the pandemic.

The pandemic has not changed the way Arshad runs his business. Operating the business in the early morning hours was a temporary coping strategy and Arshad discontinued this once the lockdown was eased. He chose not to digitize his business operations. His customers mostly pay him in cash, and most people in the locality do not have the means to buy digitally.

Among the 60 diarists of the Hrishipara Diaries project, none has a debit card, credit card, or other means to make digital payments. Though some use mobile money services (MFS), they do not use it to purchase goods at shops. In his dealings with suppliers, Arshad rarely uses DFS for payment because the suppliers, who must pay fees to withdraw the payments see it as an expensive option.

So, what do we learn?

  1. Arshad’s case highlights how bookkeeping and business training could help micro-businesses run more strategically. Not tracking income and expenditure carefully proves to be costly. Digital platforms to train micro-enterprises might help, but need to be complemented by capacity-building and by the adoption of digital systems by the low-income households that constitute Arshad’s customer base.
  2. A source of regular fixed income, in any form, is immensely important for a household’s financial health, especially in a time of crisis like COVID-19. Direct benefit transfers to the MSMEs (both formal and informal) by the government can help them maintain the financial health of their businesses.
  3. A continuous flow of nuanced data is needed to inform policy. In this regard, the Financial Diaries approach can be critical to the path toward recovery.

[1] The IFC survey sample was a mix of micro (65%), small (27%) and medium (8%) enterprises. A sample frame was prepared by collating lists of MSMEs from various sources and then sample was drawn using simple random sampling.

[2] See for example, the data on the Hrishipara Diary Project’s coronavirus page at https://sites.google.com/site/hrishiparadailydiaries/home/corona-virus

[3] The project is being funded by L-IFT since 1st June 2019

[4] 1 USD is equivalent to 85 BDT


Rahul Chatterjee