Do Matching Grants Improve Rural Household Asset Building? Insights from Smallholder Farmers
Keywords:
Matching grant programs, Smallholder Farmers, Asset Accumulation, Productive Asset, Rural LivelihoodAbstract
Smallholder farmers in developing countries often struggle to build productive assets, which limits their ability to improve their livelihoods over time. Matching grant programs are designed to help farmers invest in their farms, but it is unclear whether these programs lead to lasting improvements in household wealth. This study looks at the effect of a matching grant program on household assets using data from 352 smallholder households. We use a difference-in-differences method and create an asset index based on principal component analysis to measure changes in household assets over time. The results show that households in the program increased their asset index by about 2.63 standard deviations compared to households that did not participate (p < 0.001). In practical terms, this is similar to gaining several livestock and important farm tools, showing a clear improvement in productive capacity. Robustness checks using alternative asset measures, including factor-analysis-based indices and simple asset counts, give similar results, confirming the effect is reliable. These findings suggest that well-designed matching grant programs can help smallholder households build assets, become more resilient, and improve their long-term livelihoods.
Matching Grant Programs, Smallholder Farmers, Asset Accumulation, Productive Assets, Rural Livelihood
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