Effectiveness of mobile money in agricultural financing in Tanzania: a case of small farmers in Mang’ula, Kilombero district

The general objective of the study was to assess the effectiveness of Mobile Money in Agricultural Financing in Tanzania. It also acts as a background document that reflects the way in which the use of mobile money in Tanzania will transform the economy and the lives of its people especially those who are financially excluded. Specifically, objectives of the study were to identify the value addition associated with mobile money services, to determine the convenience of mobile money to small farmers, to determine the savings of small farmers and to find out the availability of facilities to support mobile money services. The study was conducted in Mang’ula village in Kilombero District. A descriptive design was used using both qualitative and quantitative approaches with stratified sampling to form a sample of 85 respondents. Frequency tables were also worked out. Findings from farmers’ perspective revealed that mobile money services have been effective in reducing financial exclusion especially to those people who live in rural areas, Mang’ula village being an example. This implies that, the use of mobile money services has provided the financially excluded societies with an opportunity to access financial services. Mobile money has been proved to add value to the financially excluded farmers, convenience and cost savings implying that, by using mobile money services, the farmers have been able to transact conveniently without necessarily having to travel from one place to another. However, there is a challenge in obtaining efficient services due to absence of reliable facilities such as network from mobile money operators. Another challenge is level of education of the users. Mobile money services proved to work more smoothly and effectively with those farmers who have at least attended primary school education. The Government is advised to reduce taxes such as VAT on mobile money transactions to reduce the transaction cost to users and motivate them to use mobile money services. It is also recommended that education and awareness to be provided to farmers in a view of motivating them to use mobile money services as a way of increasing financial inclusion. Expanding the research to other institutions and villages and see if it will give out some differences based on the selected factors is another avenue for other Researchers.