Mobile Money Adoption, Farm Performance and Household Welfare in Northern Ghana

In the past two decades, mobile money (MoMo) services have increasingly become popular financial inclusion technologies in developing countries. However, limited evidence exists on the effects on farm performance, welfare and agricultural investment decisions, particularly the adoption of climate-smart agricultural (CSA) practices. We contribute to filling this gap in the literature by employing a survey data on 472 farm households in three semi-arid regions of Northern Ghana. We address endogeneity issues by relying on doubly robust estimators such as inverse probability weighting regression adjustment (IPWRA) and treatment effects with least absolute shrinkage and selection operator (TELASSO) methods. We found that MoMo adoption increases maize yield, gross value of maize production, maize farming expenses and improves household welfare (measured using household consumption expenditure and poverty status). We also analyzed the causal pathways and found that MoMo adoption increases the use of inorganic inputs instead of CSA practices. These findings suggest that MoMo adoption increases farm performance and household welfare through the adoption of conventional agricultural practices and not through the use of conservation agricultural practices. Based on these findings, we recommend that the promotion of CSA practices should be integrated into MoMo services to enhance “Green Financial Inclusion” in developing countries.