Encouraging adoption of electronic payments among smallholder farmers

Location: Zambia

Client: Musika

Sectors: Agriculture, Finance

IDinsight service: Randomized evaluation

Partners: Dunavant


Smallholder famers in Central Province, Zambia.

Background
Smallholder cotton farmers in Zambia have historically been paid with cash a few days after the time of cotton sale.  This requires cotton buyers to transport large amounts of cash to remote corners of Zambia – a practice which is dangerous and expensive.  Meanwhile, most cotton farmers face immediate pressures to spend or give away cash earned from cotton, without formal options to save.

The introduction of e-finance in Zambia offers a promising avenue to reducing the risks and costs associated with paying cotton farmers while enhancing farmers’ ability to save and integrate with the formal financial sector.  However, farmers have been reluctant to accept e-payment schemes which would replace cash at time of cotton sale.

Interventions
Three monetary incentive structures for local promoters have been designed to increase e-payment adoption. 

IDinsight service
IDinsight designed a randomized controlled trial to measure the cost-effectiveness of the different incentive structures in increasing e-payment adoption.