From Savings to Credit: Exploring the Financial Behavior of Smallholder Farmers in Mali, Ghana, and Madagascar

by Annkathrin Wahbi née Possner
Cumulative thesis
Date of Examination:2024-11-13
Date of issue:2025-02-20
Advisor:Prof. Dr. Oliver Musshoff
Referee:Prof. Dr. Stephan von Cramon-Taubadel
Referee:Prof. Dr. Dr. Daniel Hermann
Persistent Address: http://dx.doi.org/10.53846/goediss-11045

 

 

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Abstract

English

Access to financial services is a critical driver of economic development, empowering individuals to break cycles of poverty. Savings enable households to withstand adverse shocks, achieve greater food security, and make small investments without incurring debt. Access to credit further enhances economic productivity by increasing investment capacity. However, considerable financial inclusion gaps persist in low- and middle-income countries, disproportionately affecting women, rural populations, and smallholder farmers. These groups often lack access to secure and affordable financial services, relying instead on costly and less reliable informal alternatives. Key barriers, such as long travel distances and transaction costs, exacerbate this exclusion, particularly for rural women burdened with domestic responsibilities. Mobile Financial Services (MFS), including mobile money and mobile banking, have emerged as transformative tools to address these challenges. By bypassing the limitations of traditional financial systems, MFS reduce transaction costs, minimize travel burdens, and provide access to digital credit even for individuals without financial histories. In Sub-Saharan Africa, MFS have demonstrated ample potential: they have become critical savings tools, enhanced economic outcomes, and reduced poverty, particularly among women and other marginalized groups. Yet, despite these advancements, notable gaps remain in understanding the preferences and needs of underserved populations such as smallholder farmers, who are highly vulnerable to income fluctuations and external shocks. This dissertation addresses these gaps by exploring savings behavior and preferences for financial services among smallholder farmers in rural Africa. Through five chapters, it investigates how tailored digital solutions can enhance financial inclusion, resilience, and development outcomes. The findings contribute to the growing body of evidence on MFS by focusing on the nuanced preferences of marginalized groups, providing actionable insights for policymakers, financial institutions, and development practitioners aiming to foster inclusive growth in low- and middle-income countries.
Keywords: Mobile Financial Services; Smallholder Farmers; Household Finance; Behavioral Economics; Discrete Choice Experiment
 
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