A new working paper has been added to the NOVAFRICA Working Paper Series.
Written by Cátia Batista and Pedro Vicente this paper analyzes the access to savings through Mobile Money.
Improving Access to Savings through Mobile Money: Experimental Evidence from Smallholder Farmers in Mozambique
Catia Batista and Pedro Vicente
Investment in improved agricultural inputs is infrequent for smallholder farmers in Africa. One barrier may be limited access to formal savings. We designed and conducted a field experiment in rural Mozambique that randomized access to a mobile savings account for a sample of smallholder farmers. All subjects were given access to mobile money and information about fertilizer use. We also randomized whether closest farming friends were targeted by the same intervention. We find that the mobile savings account increased mobile savings, the probability of fertilizer use, and the use of other agricultural inputs. We also show that the savings account increased household expenditures, in particular non-frequent ones. Our results suggest that the network intervention where farming friends had access to non-remunerated mobile money accounts may have decreased incentives to save (and invest in agricultural inputs) likely due to network free-riding because of lower transfer costs within the network. Overall this research shows that tailored mobile money products can be used effectively to improve modern agricultural technology adoption in countries with low agricultural productivity like Mozambique.
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