IDEAS home Printed from https://ideas.repec.org/p/ags/gagfdp/155847.html
   My bibliography  Save this paper

Mobile money, market transactions, and household income in rural Kenya

Author

Listed:
  • Kikulwe, Enoch M.
  • Fischer, Elisabeth
  • Qaim, Matin

Abstract

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 is through remittances, which contribute to income directly but also help to reduce risk and liquidity constraints, thus promoting agricultural commercialization. Mobile money users apply more purchased inputs, market a larger proportion of their output, and have higher farm profits. These results suggest that mobile money can help to overcome some of the important market access constraints of smallholder farmers.

Suggested Citation

  • Kikulwe, Enoch M. & Fischer, Elisabeth & Qaim, Matin, 2013. "Mobile money, market transactions, and household income in rural Kenya," GlobalFood Discussion Papers 155847, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.
  • Handle: RePEc:ags:gagfdp:155847
    DOI: 10.22004/ag.econ.155847
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/155847/files/GlobalFood_DP22.pdf
    Download Restriction: no

    File URL: https://libkey.io/10.22004/ag.econ.155847?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Pamela Jakiela & Owen Ozier, 2016. "Does Africa Need a Rotten Kin Theorem? Experimental Evidence from Village Economies," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 83(1), pages 231-268.
    2. Richard Duncombe & Richard Boateng, 2009. "Mobile Phones and Financial Services in Developing Countries: a review of concepts, methods, issues, evidence and future research directions," Third World Quarterly, Taylor & Francis Journals, vol. 30(7), pages 1237-1258.
    3. Isaac Mbiti & David N. Weil, 2015. "Mobile Banking: The Impact of M-Pesa in Kenya," NBER Chapters, in: African Successes, Volume III: Modernization and Development, pages 247-293, National Bureau of Economic Research, Inc.
    4. Nassul S. Kabunga & Thomas Dubois & Matin Qaim, 2012. "Yield Effects of Tissue Culture Bananas in Kenya: Accounting for Selection Bias and the Role of Complementary Inputs," Journal of Agricultural Economics, Wiley Blackwell, vol. 63(2), pages 444-464, June.
    5. Adams, Richard H. & Cuecuecha, Alfredo, 2013. "The Impact of Remittances on Investment and Poverty in Ghana," World Development, Elsevier, vol. 50(C), pages 24-40.
    6. Renkow, Mitch & Hallstrom, Daniel G. & Karanja, Daniel D., 2004. "Rural infrastructure, transactions costs and market participation in Kenya," Journal of Development Economics, Elsevier, vol. 73(1), pages 349-367, February.
    7. Reuben Abraham, 2007. "Mobile Phones and Economic Development: Evidence From the Fishing Industry in India," Information Technologies and International Development, MIT Press, vol. 4(1), pages 5-17, October.
    8. de Brauw, Alan & Mueller, Valerie & Woldehanna, Tassew, 2013. "Motives to Remit: Evidence from Tracked Internal Migrants in Ethiopia," World Development, Elsevier, vol. 50(C), pages 13-23.
    9. William Jack & Tavneet Suri, 2011. "Mobile Money: The Economics of M-PESA," NBER Working Papers 16721, National Bureau of Economic Research, Inc.
    10. Jenny C. Aker & Isaac M. Mbiti, 2010. "Mobile Phones and Economic Development in Africa," Journal of Economic Perspectives, American Economic Association, vol. 24(3), pages 207-232, Summer.
    11. Barrett, Christopher B., 2008. "Smallholder market participation: Concepts and evidence from eastern and southern Africa," Food Policy, Elsevier, vol. 33(4), pages 299-317, August.
    12. Kirui, Oliver K. & Okello, Julius J. & Nyikal, Rose A. & Njiraini, Georgina W., 2013. "Impact of Mobile Phone-Based Money Transfer Services in Agriculture: Evidence from Kenya," Quarterly Journal of International Agriculture, Humboldt-Universitaat zu Berlin, vol. 52(2), pages 1-22, May.
    13. Jenny C. Aker, 2010. "Information from Markets Near and Far: Mobile Phones and Agricultural Markets in Niger," American Economic Journal: Applied Economics, American Economic Association, vol. 2(3), pages 46-59, July.
    14. Dean Yang, 2008. "International Migration, Remittances and Household Investment: Evidence from Philippine Migrants' Exchange Rate Shocks," Economic Journal, Royal Economic Society, vol. 118(528), pages 591-630, April.
    15. Poulton, Colin & Dorward, Andrew & Kydd, Jonathan, 2010. "The Future of Small Farms: New Directions for Services, Institutions, and Intermediation," World Development, Elsevier, vol. 38(10), pages 1413-1428, October.
    16. Muto, Megumi & Yamano, Takashi, 2009. "The Impact of Mobile Phone Coverage Expansion on Market Participation: Panel Data Evidence from Uganda," World Development, Elsevier, vol. 37(12), pages 1887-1896, December.
    17. Ignacio Mas & Olga Morawczynski, 2009. "Designing Mobile Money Services Lessons from M-PESA," Innovations: Technology, Governance, Globalization, MIT Press, vol. 4(2), pages 77-91, April.
    18. Di Falco, Salvatore & Bulte, Erwin, 2013. "The Impact of Kinship Networks on the Adoption of Risk-Mitigating Strategies in Ethiopia," World Development, Elsevier, vol. 43(C), pages 100-110.
    19. Fischer, Elisabeth & Qaim, Matin, 2012. "Linking Smallholders to Markets: Determinants and Impacts of Farmer Collective Action in Kenya," World Development, Elsevier, vol. 40(6), pages 1255-1268.
    20. Mark Pickens, 2009. "Window on the Unbanked : Mobile Money in the Philippines," World Bank Publications - Reports 9488, The World Bank Group.
    21. Ignacio Mas, 2009. "The Economics of Branchless Banking," Innovations: Technology, Governance, Globalization, MIT Press, vol. 4(2), pages 57-75, April.
    22. Rao, Elizaphan J.O. & Qaim, Matin, 2011. "Supermarkets, Farm Household Income, and Poverty: Insights from Kenya," World Development, Elsevier, vol. 39(5), pages 784-796, May.
    23. Chamberlin, Jordan & Jayne, T.S., 2013. "Unpacking the Meaning of ‘Market Access’: Evidence from Rural Kenya," World Development, Elsevier, vol. 41(C), pages 245-264.
    24. Robert Jensen, 2007. "The Digital Provide: Information (Technology), Market Performance, and Welfare in the South Indian Fisheries Sector," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(3), pages 879-924.
    25. Ahmed Dermish & Christoph Kneiding & Paul Leishman & Ignacio Mas, 2011. "Branchless and Mobile Banking Solutions for the Poor: A Survey of the Literature," Innovations: Technology, Governance, Globalization, MIT Press, vol. 6(4), pages 81-98, October.
    26. Annemie Maertens & Christopher B. Barrett, 2013. "Measuring Social Networks' Effects on Agricultural Technology Adoption," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 95(2), pages 353-359.
    27. Jenny Aker, 2008. "Does Digital Divide or Provide? The Impact of Cell Phones on Grain Markets in Niger," Working Papers 154, Center for Global Development.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Beck, T.H.L. & Pamuk, H. & Uras, R.B. & Ramrattan, R., 2015. "Mobile Money, Trade Credit and Economic Development : Theory and Evidence," Other publications TiSEM 3d35ab30-05ef-4a31-8710-f, Tilburg University, School of Economics and Management.
    2. Beck, Thorsten & Pamuk, Haki & Ramrattan, Ravindra & Uras, Burak R., 2018. "Payment instruments, finance and development," Journal of Development Economics, Elsevier, vol. 133(C), pages 162-186.
    3. Thorsten Beck & Ravindra Ramrattan & Haki Pamuk & Burak R. Uras, 2016. "Payment Instruments, Enforceability and Development: Evidence from Mobile Money Technology," 2016 Meeting Papers 198, Society for Economic Dynamics.
    4. Ggombe Kasim Munyegera & Tomoya Matsumoto, 2015. "ICT for Financial Inclusion: Mobile Money and the Financial Behavior of Rural Households in Uganda," GRIPS Discussion Papers 15-20, National Graduate Institute for Policy Studies.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Enoch M Kikulwe & Elisabeth Fischer & Matin Qaim, 2014. "Mobile Money, Smallholder Farmers, and Household Welfare in Kenya," PLOS ONE, Public Library of Science, vol. 9(10), pages 1-13, October.
    2. Krone Madlen & Dannenberg Peter, 2018. "Analysing the effects of information and communication technologies (ICTs) on the integration of East African farmers in a value chain context," ZFW – Advances in Economic Geography, De Gruyter, vol. 62(1), pages 65-81, March.
    3. Eduardo Nakasone & Maximo Torero, 2016. "A text message away: ICTs as a tool to improve food security," Agricultural Economics, International Association of Agricultural Economists, vol. 47(S1), pages 49-59, November.
    4. Gershom Endelani Mwalupaso & Shangao Wang & Zhangxing Xu & Xu Tian, 2019. "Towards Auspicious Agricultural Informatization—Implication of Farmers’ Behavioral Intention Apropos of Mobile Phone Use in Agriculture," Sustainability, MDPI, vol. 11(22), pages 1-21, November.
    5. Sekabira, Haruna & Qaim, Matin, 2016. "Mobile Money, Agricultural Marketing, and Off-Farm Income in Uganda," GlobalFood Discussion Papers 234998, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.
    6. Gershom Endelani Mwalupaso & Shangao Wang & Sanzidur Rahman & Essiagnon John-Philippe Alavo & Xu Tian, 2019. "Agricultural Informatization and Technical Efficiency in Maize Production in Zambia," Sustainability, MDPI, vol. 11(8), pages 1-17, April.
    7. van der Boor, Paul & Oliveira, Pedro & Veloso, Francisco, 2014. "Users as innovators in developing countries: The global sources of innovation and diffusion in mobile banking services," Research Policy, Elsevier, vol. 43(9), pages 1594-1607.
    8. Sekabira, Haruna & Qaim, Matin, 2017. "Can mobile phones improve gender equality and nutrition? Panel data evidence from farm households in Uganda," Food Policy, Elsevier, vol. 73(C), pages 95-103.
    9. Richard A. Duncombe, 2014. "Understanding the Impact of Mobile Phones on Livelihoods in Developing Countries," Development Policy Review, Overseas Development Institute, vol. 32(5), pages 567-588, September.
    10. Ward, Michael R. & Zheng, Shilin, 2016. "Mobile telecommunications service and economic growth: Evidence from China," Telecommunications Policy, Elsevier, vol. 40(2), pages 89-101.
    11. Melia, Elvis, 2019. "The impact of information and communication technologies on jobs in Africa: a literature review," IDOS Discussion Papers 3/2019, German Institute of Development and Sustainability (IDOS).
    12. Jean-Philippe Berrou & François Combarnous & Thomas Eekhout, 2017. "Les TIC : une réponse au défi du développement des micro et petites entreprises informelles en Afrique sub-saharienne ?," Working Papers hal-02148324, HAL.
    13. Joseph I. Uduji & Elda N. Okolo-Obasi, 2018. "Young Rural Women Participation in the E-Wallet Programme and Usage Intensity of Modern Agricultural Inputs in Nigeria," Working Papers of the African Governance and Development Institute. 18/062, African Governance and Development Institute..
    14. Sanne Lise Blauw & Philip Hans Franses, 2011. "The Impact of Mobile Telephone Use on Economic Development of Households in Uganda," Tinbergen Institute Discussion Papers 11-152/4, Tinbergen Institute.
    15. 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.
    16. Maëlle Della Peruta, 2015. "Mobile Money Adoption and Financial Inclusion Objectives: A Macroeconomic Approach through a Cluster Analysis," GREDEG Working Papers 2015-49, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France.
    17. Eliud Dismas Moyi, 2019. "The effect of mobile technology on self-employment in Kenya," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 9(1), pages 1-13, December.
    18. Mothobi, Onkokame & Grzybowski, Lukasz, 2017. "Infrastructure deficiencies and adoption of mobile money in Sub-Saharan Africa," Information Economics and Policy, Elsevier, vol. 40(C), pages 71-79.
    19. Sekabira, Haruna & Qaim, Matin, 2017. "Can Mobile Phones Improve Gender Equality and Nutrition? Panel Data Evidence from Farm Households in Uganda," GlobalFood Discussion Papers 256215, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.
    20. Abreha,Kaleb Girma & Choi,Jieun & Kassa,Woubet & Kim,Hyun Ju & Kugler,Maurice David, 2021. "Mobile Access Expansion and Price Information Diffusion : Firm Performance after Ethiopia’s Transition to 3G in 2008," Policy Research Working Paper Series 9752, The World Bank.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:gagfdp:155847. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/iagoede.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.