Universidade Nova de Lisboa, NOVAFRICA, and IZA
Universidade Nova de Lisboa, NOVAFRICA, and BREAD
Working Paper No 1705
Revised on April 2018
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 with a sample of smallholder farmers in rural Mozambique. This sample included a set of primary farmers and their closest farming friends. We work with two cross-randomized interventions. The first treatment gave access to a remunerated savings account through mobile money. The second treatment targeted closest farming friends and gave them access to the exact same interventions as their primary counterparts. We find that the savings account increased 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 decreased social pressure to share resources and that the savings account protected farmers against this network pressure.
This working paper has been published in World Development.