The recent introduction of mobile phone-based money transfer (MMT) services in developing countries has generated a lot of interest among development partners. It facilitates transfer of money in a quick and cost effective way. It also offers an easy and secure platform for small savings to majority of rural populations with no access to formal financial services. However, the impact of MMT services on smallholder agriculture has not been documented. This study therefore contributes to pioneering literature on the impact of MMT, especially in agriculture. It provides information regarding financial intermediation to the excluded through the use of new generation Information Communication Technology (ICT) tools especially the mobile phone. The study employs propensity score matching technique to examine the impact of MMT services on household agricultural input use, agricultural commercialization and farm incomes among farm households in Kenya. It uses cross-sectional data collected from 379 multi-stage randomly selected households in Central, Western and Nyanza provinces of Kenya. The study found that use of MMT services significantly increased level of annual household input use by $42, household agricultural commercialization by 37% and household annual income by $224. We conclude that MMT services in rural areas help to resolve an idiosyncratic market failure that farmers face; access to financial services. We therefore recommend that other developing countries should follow the Kenyan model and provide an enabling environment that would facilitate entry and survival of MMT initiatives.

Structural adjustments programs (SAPs) in the last two decades have eliminated all farm-support programs leading to low usage of fertilizers by Kenyan smallholders. One way of addressing this problem is use of organic nutrient resources. This paper examines their cost-effectiveness as capital investments in replenishment of Nitrogen (N), Phosphorus (P), Potassium (K) and soil organic matter (SOM) in smallholder, Maize-based cropping systems. On-farm trials were established in Maragwa and Kirinyaga Districts in 2003/04. Maize was planted in 3 replicates in randomised complete block design (RCBD) using different levels of organic and inorganic fertilizer resources. A blanket rate of 40kg P/ha was applied in all treatment except the control to increase organic N-utilization efficiency. The test crop was harvested, oven-dried and weighed. Net Present Values (NPV) were computed using Partial Budgeting Analysis Model. Increasing levels of inorganic N increased maize yields significantly (P<0.05). However, higher yields were necessary but not sufficient criteria to determine profitability of different treatments. Manure + 60 kg N/ha gave highest NPV (USD 564), Manure + 40kg N/ha gave second highest NPV (USD 511) in Maragwa District while Manure + 60kg N/ha gave highest NPV (USD 633) and Manure + 40kg N/ha second highest NPV (USD 618) in Kirinyaga District. These results suggested that higher N-levels were not necessarily the most economical. Use of organic resources with modest amounts of mineral fertilizers seemed more profitable and held the key to enhancement of nutrient budgets, food security and rural livelihoods.