Influence of Digital Financial Services on Agricultural Productivity among Smallholder Farmers in Musanze District, Rwanda

Olive Mukamugisha and Thomas Tarus
University of Kigali, Rwanda
Email: amina2020mugisha@gmail.com

Abstract: Digital financial services (DFS) have emerged as important tools for promoting financial inclusion and supporting agricultural activities in developing countries. This study examined the influence of digital financial services on agricultural productivity among smallholder farmers in Musanze District, Rwanda. Specifically, it assessed the influence of mobile money, digital credit, digital savings, and digital payment services on agricultural productivity. A quantitative research design was employed, targeting 5,500 smallholder farmers. A sample of 373 farmers was selected, yielding 332 valid responses and an 89.0% response rate. Data were analyzed using descriptive statistics, Pearson correlation, and multiple linear regression. The findings revealed strong and significant positive relationships between agricultural productivity and mobile money (r = .843, p < .01), digital credit (r = .770, p < .01), digital savings (r = .722, p < .01), and digital payments (r = .820, p < .01). The multiple regression model explained 81.0% of the variation in agricultural productivity (R² = .810). The study concludes that digital financial services significantly contribute to agricultural productivity by facilitating financial transactions, improving access to agricultural resources, strengthening financial management, and supporting market participation. The study recommends strengthening digital financial infrastructure and literacy, expanding appropriate digital credit and savings products, and improving the reliability and affordability of digital payment services.