Determinants of use and intensity of use of mobile phone - based money t ransfer services in smallholder agriculture: case of Kenya

Abstract

Smallholder farmer access to agricultural finance has been a major constraint to agricultural commercialization in developing countries. The ICT revolution in Africa has however brought an opportunity to ease this constraint. The mobile phone-based money transfer (MMT) services that started in Kenya urban centres have spread to rural areas and even other countries. Using these services farmers could receive funds to invest in agricultural financial transactions. This study examines the factors that influence use of MMT services among farm households in Kenya. It also assesses the factors conditioning the intensity of use of such services. The study finds education, distance to a commercial bank, membership to farmer organizations, distance to the m-banking agents and endowment with physical and financial assets affect the use of m-banking services. It discusses the implications of these findings for policy and practice.