Introduction

Causes of periodic financial difficulties among African peasants. It is unfortunate to see crop producers buying crops to survive, rice farmers running out of rice, and even countries importing rice as their staple food. Financial literacy among peasants matters in several African countries. Food scarcity is common during the lean season, when crops are still growing. Action is needed to alleviate the cycle of hunger and financial issues in the countryside, but basic financial knowledge is also necessary.

Consequences of the Lack of Financial Literacy Culture

Farmers usually set high goals and reach them if there are no obstacles. A farming year is beneficial if crops are good and agricultural diseases are controlled. Managing their well-being and activities requires money: to buy fertilizers, medicines, to pay technicians and veterinarians, to hire fellow labourers. Often, one family may produce 2 tons of tomatoes and buy a motorcycle with the money earned. Other families might buy one with money from sold onions. Peasants in a nearby village may buy a car to showcase their prosperity from rice planting. This financial behaviour often confuses capital with profit. Blind investment and lack of savings lead to bankruptcy because the motorcycles and cars are not used to generate income.

Debts Flood Peasants

In Madagascar, food scarcity sometimes pushes peasants to borrow from banks under the pretext of investing in their activities. However, the money borrowed often does not uplift their revenue efficiently. Banks and microfinance institutions offer financial advice to their customers. Yet, many peasants are illiterate and may misunderstand loss, debts, and interest rates. Microfinance agencies often require yearly crops (rice) and materials as loans. In reality, debtors in the countryside sell land, zebu, or rice fields to repay the debt.

Practical Solutions

Appropriate platforms are needed to offer financial education to farmers. NGOs and associations, supported by the State, should take on this challenge. It is feasible to develop financial literacy programmes suitable for a given region based on its production and population activities. Experts and technicians could train peasants through radio broadcasting. In Madagascar, some radio stations already conduct useful and regular training for peasants. Several good financial management formulas can benefit peasants. For example, the 50/30/20 rule: 50% of income for essential needs, 30% for wants, and 20% for savings. New research results on such financial literacy and entrepreneurship formulas should be communicated.

Conclusion

In brief, financial education for peasants and labourers will improve life conditions in the countryside. Healthy money management empowers their activities and fosters agribusiness. While peasants cannot control natural catastrophes, they can manage financial disasters.