Abstract: The challenge of agricultural finance for most of the financial institution dealing with small scale farmers in the sub Saharan Africa is the high cost of financing rural smallholder farmers. The dairy industry in Kenya contributes 14 percent of agricultural GDP and 3.5 percent of total GDP GOK, (2008). Milk production is predominantly by small scale farmers, who own one to three dairy animals, and produce about 80 percent of the milk in the country KDB, (2009). Mobile money payments by farmers provides the transactional leveraging on branchless banking distribution channel for mobile banking credit, savings and micro insurance products. This study sought to fill the gap in the literature on financial inclusion by analysing the contribution of mobile use in payments of their loans among small scale dairy farmers in the microfince sector Nakuru County, Kenya. The study sample comprised of 165 dairy farmers’ borrowers from Micro Kenya. Data was collected through questionnaire, focus groups, and key informant interviews and both qualitative and quantitative methods were used to analyse the data. The study findings made an attempt at predicting current mobile payment channels have the potential to improve the repayment rate of small scale dairy farmers by cutting down travel costs and increase in accessibility. The study findings indicate that mobile phones have significantly changed the way financial institutions conduct their services. The bulk of current users say they use mobile money to help them manage short-term ups and down in cash flow as well as to save for short-term goals. From the study mobile money have contributed positively in improving small holder dairy farmers with fast and easy modes of payment, with improved payment have increased their ability to borrow financial access,
Keywords: Mobile Money, Microfinance, small Scale dairy farmers, Loan repayment.
Title: Digital Financial Services Insights and Loan Repayment in Microfinance Institutions: A Study of Small Scale Dairy Farmers in Nakuru Municipality, Kenya
Author: Oliver Barasa, Lawrence K. Kibet, Hillary Bett
International Journal of Social Science and Humanities Research
ISSN 2348-3156 (Print), ISSN 2348-3164 (online)
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