Rural-Urban Complementarities for the Reduction of Poverty (RUCROP): Identifying the Contribution of Savings and Credit Facilities
People increasingly organize their livelihood activities and strategies by straddling rural and urban locations. Personal, institutional and organizational links are established and enhanced across space which provides rural and urban living to complement each another. The main objective of the project is to gain a thorough understanding of the poverty reducing effects of the complementarities between rural and urban livelihoods and how saving and credit facilities enhance these complementarities. The project focuses on how emerging urban centres (EUCs) in rural areas can function as vehicles for these processes. The project includes four case studies on EUCs in Tanzania: i) Ilula/Mazombe in Kilolo District characterized by tomato trade, ii) Igowole in Mafinga District characterized by Tea production and processing, iii) Kibaigwa in Kongwa District characterized by Maize trade and iv) Turiani in Mvomero District characterized by Sugarcane production and processing. Thus each study EUC is expected to perform complementarities with rural settlements given the different economic dynamics spurring the economic and demographic growth and diversification.
Completion Report - Summary:
RUCROP explored the role of rural-urban complementarities in reducing poverty and provides important insights into the complex and diverse transformation processes from being rural villages to becoming emerging urban centres (EUCs). Evidence is based on research conducted in four EUCs and their immediate hinterlands. The value chain of a dominant crop in each site influenced the initial transformation and growth of EUCs from being largely rural village. The growth pathways slightly differ depending on the type of the dominant crop; manufacturing based tea and sugarcane or marketing/trade based tomato and maize. It has been shown that EUCs serve as main trading/marketing centres that stimulate farm and non-farm livelihood opportunities and increase employment opportunities which are good source of remittances. Diversity in economic activities and livelihood opportunities has made EUCs become places of attraction to migrants from immediate and distant rural hinterlands. EUCs have also become places of investment for business investors, small entrepreneurs, and, financial services. However, investments in EUCs are diverse and include a range of business opportunities associated with the dominant crop and beyond. Financial services are not only sources of credit and saving in the EUCs, but also apply to the immediate rural hinterland. Credit is used to improve both agricultural innovations and non-agricultural investments. However, further growth of such opportunities in the near future in unclear due to limited institutional support. Concerted governmental and non-governmental efforts to actually stimulate the transition may make a positive difference. This could be achieved through strengthening of governance structure(s)–both financial and manpower side.