Using Mobile Money, Mobile Banking to Enhance Agriculture in Africa

This paper provides an overview of mobile money (m-money) and mobile banking (m-banking) services in Africa. It describes their current and potential use for agriculture-related projects and lists lessons learned to date and issues to consider in the future.

M-money services are growing dramatically in sub-Saharan Africa. They offer opportunities to increase access to financial services and ease the flow of financial transactions within agriculture value chains. The paper states that:

• M-money services make financial transactions and management easier for smallholder farmers, input suppliers, traders and buyers;
• M-money and m-banking initiatives have not scaled-up in most African countries, and there are few actual examples of their use in agriculture development projects;
• Most bank-led m-banking services have not benefited smallholder farmers or the rural unbanked, but this will change as more banks implement m-banking services;
• Lessons learned about m-banking include the importance of caution, analysis of scale-up possibilities, understanding the advantages of competition and role of donors.

The paper predicts that m-money will scale-up in Africa and more banks will offer savings through m-banking. Agriculture development projects will then be able to leverage these services.