The Influence of Agency Banking and Mobile Money Services on Farmers’ Welfare in Mvomero District, Tanzania

Abstract

In many developing countries inadequate and poor access to appropriate financial services has been one of the major challenges facing smallholder farmers particularly in rural areas. The limited access to financial services make rural farmers confine themselves to poor low-risk crops and sub-optimal inputs, which results in lower yield and poor household livelihoods. In recent years agency banking and mobile money services have emerged as one of the major means of financial services among many rural communities in Tanzania. The growing literature on the role of agency banking and mobile money in promoting financial inclusion in Tanzania has been widely reported, with a less focus on farmers’ livelihoods. This paper examines the influence of agency banking and mobile money services on farmers welfare with the case of Mvomero districts, Morogoro region, Tanzania. A mixed approach of qualitative and quantitative methods was applied in this study. Major techniques used in data collection included documentary review, household questionnaire, Key Informant Interviews (KII), Focus Group Discussions (FGD) and field observation. Data were analysed by descriptive statistics and content analysis techniques. The results show that the presence of agency banking and mobile money services has promoted improved saving and enhanced agricultural investments among rural farmers which contributes to improvement of farmers’ welfare in Mvomero district. The study recommends that the government should promote the availability of agency banking to various rural communities because they stimulate agricultural investment and improved household welfare which consequently promotes rural transformation in general.

Keywords: Agency banking, mobile money, farmers’ welfare, Mvomero district.

DOI: 10.7176/JESD/14-12-07

Publication date:June 30^th 2023