Climate resilience in the palm of a hand: digital financial inclusion and cocoa farmers’ adoption of climate smart agricultural technologies in Ghana

Abstract Smallholder farmers face increasing climate risks but often lack access to financial services needed to adopt climate-smart agricultural technologies (CSATs). This study examined the impact of digital financial inclusion (DFI) on the CSATs in Ghana. Utilizing random data from 532 cocoa farmers, we account for endogeneity associated with DFI by employing a recursive bivariate probit (RBP) regression model. The results show that household size, credit access, membership in farmer-based organizations (FBOs), farm size, cocoa yield, and bank account ownership significantly influence the use of mobile money services. Additionally, the use of digital banking services was significantly affected by education, marital status, extension contact, FBO membership, land ownership, farm plots, distance to financial institutions, cocoa yield, and bank account ownership. Overall, digital financial inclusion significantly impacts the adoption of CSATs. Specifically, digital banking exerts significant positive impact on agroforestry and tree basins whereas mobile money substantially impacts the adoption of integrated pest management and husk mulching. Policymakers need to engage farmers in digital financing through extension officers and FBO to heighten the benefits of DFI and adoption of CSATs. Policies such as developing targeted educational outreach and promoting the uptake of digital banking and mobile money services can be facilitated through campaigns and training on how to use these tools for CSATs transactions in developing countries.