The recent proliferation of mobile phones in rural Africa has also led to increased interest in mobile financial services (MFS), such as mobile money and mobile banking. Such services are often portrayed as promising tools to improve agricultural finance, especially among smallholders who are typically underserved by traditional banks. However, empirical evidence on the actual use of MFS for agricultural activities is thin. Here, we use nationally representative data from Kenya to analyze the use of mobile payments, mobile savings, and mobile credit among the farming population. We find that more than 80% of farmers use mobile money, but only 15% use this innovation for agriculture-related payments. Mobile loans for agricultural investments are used by less than 1% of farmers. Usage rates are somewhat higher among farmers in modern supply chains, even though for them traditional banking services are often also accessible and still much more important. Overall, the use of MFS for agriculture is lower than commonly assumed, indicating that these services do not yet have a transformative impact on smallholder farming. As Kenya is one of the leaders of the MFS boom in Africa, this general finding likely holds for other African countries as well.
Mobile phone based money services have spread rapidly in many developing countries. We analyze micro level impacts using panel data from smallholder farmers in Kenya. Mobile money use has a large positive net impact on household income. One important pathway...
This paper analyses a biotechnology-focused project which aims to promote the development and adoption of tissue culture bananas by small-scale farmers in Kenya. The paper highlights the generation of several important narratives that are used to justify the development and...
Classical innovation adoption models implicitly assume homogenous information flow across farmers, which is often not realistic. As a result, selection bias in adoption parameters may occur. We focus on tissue culture (TC) banana technology that was introduced in Kenya more...
Background
Smallholder farmers in developing countries are particularly vulnerable to climate shocks but often lack access to agricultural insurance. Weather index insurance (WII) could reduce some of the problems associated with traditional, indemnity-based insurance programs, but uptake has been lower...
Weather risk is a serious issue in the African small farm sector that will further increase due to climate change. Farmers typically react by using low amounts of agricultural inputs. Low input use can help to minimize financial loss in...