Awareness and use of m-banking services in agriculture: The case of smallholder farmers in Kenya

Smallholder farmer access to agricultural finance has been a major constraint to agricultural commercialisation in developing countries, yet ICT revolution in Africa has brought an opportunity to ease that constraint. This study assesses the level of awareness and usage of mobile phone-based money transfer among smallholder farmers in Kenya. The paper believes that using these services farmers could receive funds to invest in agriculture finance transactions.<br /><br />Main findings include:<br /> high awareness of m-banking services is showing among the smallholder farmers in Kenya, but this level of awareness has not been translated into practical usage the usage of mobile phone is significantly higher in regions with greater level of agricultural commercialisation the further the m-banking agent is from the farmers, the lower the likelihood of usage in this context, lack of adequate float is one of the major constraints to the use of m-banking in remote areas where majority of clients use the service to receive cash remittances from friends and family moreover, education, distance to a commercial bank, membership to farmer organisations, and endowment with physical and financial assets affect the use of m-banking services<br /><br />The implications of these findings are that:<br /> there is need to expand the coverage of m-banking services in rural areas attention should be given to infrastructural constraints facing rural areas, namely the lack of electricity m-banking service providers should consider expanding the availability of sufficient &ldquo;float&rdquo; of funds to expedite transfers into and from farming communities policymakers and the private sector should prioritise investments in linking farmers to financial services <br />