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

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  • 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. JEL codes: D14, D85, Q12, Q14

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, Faculdade de Economia, NOVAFRICA.
  • Handle: RePEc:unl:novafr:wp1705
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    File URL: http://novafrica.org/wp-content/uploads/2017/08/1705.pdf
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    Cited by:

    1. repec:gam:jsusta:v:11:y:2019:i:3:p:568-:d:199876 is not listed on IDEAS
    2. De Mel, Suresh & Mcintosh, Craig & Sheth, Ketki & Woodruff, Christopher, 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.

    More about this item

    Keywords

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

    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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