Effectiveness of Mobile Money Model on Savings Among the Coffee Smallholder Farmers a Case Study: Kapchorwa District in Uganda
Author: Sarah Drajoru
Supervisor: Marius Murongo Flarian
The study assessed the effectiveness of the mobile money model regarding its ability to help the coffee smallholder farmers of Tingey County, Kapchorwa District of Uganda saving money. The explorative study gleaned quantitative and qualitative data through face-to-face interviews with 159 farmers using semi/structured interviews and key informants as well as analysed data using SPSS version 21.
The study registered some significant results: firstly, all of the respondents studied owned MTN customer mobile money account; moreover, 46% of them owned MoKash accounts. Additionally, 39% of the respondents saved in the MoKash accounts as evidenced by the high frequency of deposits, withdrawals, volume of transactions and duration the funds stayed in the MoKash accounts before withdrawals. Equally, significant, the free accounts registration and the low amount or value (50UGX) required to start saving money in MoKash account among other saving strategies that enthused the respondents to start or increase saving money in MoKash accounts.
Despite these noteworthy results, the study also recorded some challenges the respondents encountered in saving money through a MoKash account. This included the sparsely populated agent points, the high tariffs charged on the products and services, poor connectivity, insufficient money to save and the availability of other MMS use cases confronted savings. Regardless of the challenges, the Financial Service Providers - FSP is not an antidote to help overcome all obstacles that the respondents encountered. However, the study recommended areas for improvement to further increase amounts of money saved in the MoKash account. These include improving marketing communication strategies to promote its adoption and usage more widely and to offer promotional packages (incentives) and SMS to the MoKash savers (users) to advance the users awareness on innovation beyond the promotional period. Furthermore, it recommended, piloting deductions for savings at the payment sources of the respondents and encourage respondents to set saving targets that limit or attaching penalties for excessive withdrawals, encourage access and financial usage by reducing withdrawal tariff (fees and taxes), increase agent points and strengthen the network.
Those recommendations will facilitate to increase the frequency of deposits and volume of saving and minimise the number of withdrawals, thus enabling the respondents to save more and better respond to shocks or emergencies, and subsequently, increase the country's GDP accrued from interests earned on savings of MMS industry.