Mobile money services boost rural households

Mobile phones can cause significant benefits for rural households through improved access to information, lower marketing costs, and thus higher profits and incomes, notes study.

‘Mobile Money, Smallholder Farmers, and Household Welfare in Kenya’, a recently published study in PLoS ONE journal; analyses impacts of mobile money technology on the welfare of smallholder farm households in Kenya. Using panel survey data and regression models, the study shows that mobile money use has a positive impact on household income. 

Introduced in several countries of Africa, Asia, and Latin America by private telecommunication providers, mobile money services do not only enable cheap and reliable money transfers between people that have access to a mobile phone, but also can help to overcome some of the important smallholder market access constraints that obstruct rural development and poverty reduction, according to the study. 

The study examines potential impact pathways of mobile money in terms of remittances received, transactions in input and output markets, and farm profits. Moreover, effects on total household income, including farm and non-farm sources are also analysed. Given diversified income sources in the small farm sector, total household income is a more comprehensive welfare measure than agricultural income. The study concentrates on farm households in Kenya, where mobile money services have spread rapidly in recent years.

More information: PLoS ONE