Welfare impact of private sector interventions on rural livelihoods: the case of Masvingo and Chiredzi smallholder farmers

Improving livelihoods in rural areas is important to progress of the developing world and it helps in the creation of the domestic demand for the productive sector. Private sector partnerships in rural areas have been the major driver to reduction of market uncertainties and management of risk and thus bring development, these partnerships are done through private loans and contract farming in Zimbabwe. The major question however is do these partnerships increase rural household welfare in Zimbabwe or it is clearly a capitalist method of rural labour exploitation. Using Propensity Score Matching (PSM) method for rural communities in Chiredzi and Masvingo rural in Zimbabwe we found out that individual households that participates in contract farming and private loans have increased welfare gains than those that do not participate.