Providing farmers access to an interest-bearing mobile savings accounts increased their mobile savings and likelihood of investing in fertilizer, likely because it focused farmers’’s limited attention on savings and investing in their plot.

Mobile savings: The researchers found that the savings group increased the amount farmers saved in their mobile money account by 32 percent in the first year relative to the comparison group’s average savings of MZN 87 (US$ 1.16). For farmers that solely received the savings group, instead of the savings bundled with the network group, their savings increased by 38 to 44 percent. These savings were in part due to increased transfers from people outside of the village network.

The network group, however, did not have a significant impact on savings. When their closest farming friends also received the mobile money and fertilizer package, farmers actually reduced their savings. This was especially the case for farmers that did not receive the interest-bearing mobile money savings account. This negative effect may have been because the mobile money account reduced the cost of transferring money to friends, thereby discouraging saving behavior.

Agricultural investment: The savings group also increased the likelihood of using fertilizer by 28 to 36 percentage points, a large increase from the 22 percent that used fertilizer in the comparison group. However, the savings group did not increase other agricultural investments that complement fertilizer use, such as improved seeds, hiring of farm workers, or use of irrigation pumps. The fact that the mobile money interest was paid in fertilizer may help explain this increase. The researchers hypothesize that the accumulated interest paid as fertilizer right after the harvest (when farmers have the most financial resources available) may have served as a reminder to focus farmers’ limited attention to save some of their harvest profits to invest in fertilizer for next year’s crop. This also suggests that limited attention to saving, rather than financial constraints due to lack of alternative ways to save, was the main barrier to investment in agricultural technology in this context.

Household spending: The savings account increased spending on less frequent items and overall spending, and to a lesser extent day-to-day spending. Farmers likely used increased savings to buy non-frequent goods and services such as agricultural inputs.

Overall, this research shows that mobile money can be used as a platform to incentivize adoption of modern agricultural technologies such as fertilizer, when it is adequately tailored.