Digital Financing Services and Agri-Business Performance Rwanda

Abstract

Agriculture in developing countries including Rwanda is progressing provides the basic necessities for the families and the country. The availability of technology within the compilation of agriculture would be of added value so as to solve the poverty issue and boost agriculture productivity which in turn ensures food security. The current research aims to identify the contribution of digital financing towards agricultural productivity in Rwanda. The general objective of this research is to explore the role of digital financing in Agricultural Productivity, Specifically, the following objectives were considered:  To assess the digital financing services offered to farmers in Rwanda, to examine the role of digital financial services on agricultural productivity, to examine the challenges that farmers face in using digital financing in Rwanda. The study adopted the descriptive survey as a study design. The target population was 1300 from 6 Rwandan Districts, RAB agriculture specialists, Agronomists at the Sector and at the District, and agents banking from institutions that offer digital financial services. The sample size was 329 individuals, among them there are 305 respondents which got through the Simple random sampling method and 24 respondents got from the purposive sampling method. The primary data was collected through structured questionnaires; whereas secondary data through reading and analysis of relevant books, reports and journals. The data collected was edited, coded and fed into SPSS software v. 20 and Microsoft Excel for analysis, using descriptive, inferential statistics. Regression analysis was done to investigate the relationship between hypothesized variables. The research findings revealed that among the major of digital financing services offered to farmers to increase their agricultural productivity, Mobile Banking and Mobile Money is at 68.5% and the study participants’ perceptions on the role played by digital financial services on the agricultural productivity where reported that they agreed by 94.1% that digital finances play a key role in the agricultural productivity in Rwanda. On the side, among the main challenges faced by farmers in using digital financing in Rwanda, limited digital literacy was reported at 44.6%. The study found that digital financing services have a weak negative contribution to Agricultural productivity where it contributes (β=-0.215) to Agricultural productivity. The Agent Banking services also have a weak negative contribution towards Agricultural productivity (β=-0.038) on Agricultural productivity and the digital wallets has a contribution of (β=-0.197) on Agricultural productivity. In conclusion, the researcher found that Digital Financial Services has a statistically significant contribution to the Agricultural productivity of Rwanda.