Mobile Banking, Agricultural Productivity and Welfare: Household Panel Data Evidence From West Africa

ABSTRACT Limited access to finance and savings is widely recognized as a major constraint to rural development in most sub‐Saharan African countries. The transformative potential of digital finance for improving the livelihoods of the poor is a subject of growing interest among economists and development practitioners. This paper investigates the relationship between the use of mobile banking services, agricultural productivity, and household welfare using detailed micro‐level panel data from Benin, Côte d'Ivoire, Guinea‐Bissau, and Togo. Employing a comprehensive identification strategy, our findings indicate that mobile banking use significantly enhances both productivity and welfare outcomes for smallholder farmers. Specifically, mobile banking is associated with approximately 10% higher agricultural productivity, 4% higher per capita food consumption expenditure, and 12% higher per capita non‐food consumption expenditure. These results underscore the importance of expanding access to mobile financial services as a lever for promoting rural development.