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Improving access to savings through mobile money: Experimental evidence from smallholder farmers in Mozambique

Author

Listed:
  • Catia Batista
  • Pedro Vicente

Abstract

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 savings account through mobile money to 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 savings account increased savings, the probability of fertilizer use, by 31-36 pp, 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.

Suggested Citation

  • Catia Batista & Pedro Vicente, 2017. "Improving access to savings through mobile money: Experimental evidence from smallholder farmers in Mozambique," NOVAFRICA Working Paper Series wp1705, Universidade Nova de Lisboa, Nova School of Business and Economics, NOVAFRICA.
    • Handle: RePEc:unl:novafr:wp1705
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    Citations

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    Cited by:

    1. Woodruff, Christopher & De Mel, Suresh & Sheth, Ketki & McIntosh, Craig, 2018. "Can Mobile-Linked Bank Accounts Bolster Savings? Evidence from a Randomized Controlled Trial in Sri Lanka," CEPR Discussion Papers 13378, C.E.P.R. Discussion Papers.
    2. James Atta Peprah & Clement Oteng & Joshua Sebu, 2020. "Mobile Money, Output and Welfare Among Smallholder Farmers in Ghana," SAGE Open, , vol. 10(2), pages 21582440209, June.
    3. Leo Van Hove & Antoine Dubus, 2019. "M-PESA and Financial Inclusion in Kenya: Of Paying Comes Saving?," Sustainability, MDPI, vol. 11(3), pages 1-26, January.
    4. Catia Batista & Pedro C. Vicente, 2018. "Is mobile money changing rural Africa? Evidence from a field experiment," NOVAFRICA Working Paper Series wp1805, Universidade Nova de Lisboa, Nova School of Business and Economics, NOVAFRICA.

    More about this item

    Keywords

    Mobile money; savings; agriculture; smallholder farmers; social networks; field experiment; Mozambique; Africa.;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q14 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Finance

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