Technology Adoption and Access to Credit via Mobile Phones

62 Pages Posted: 7 Oct 2019

See all articles by Apoorv Gupta

Apoorv Gupta

Dartmouth College

Jacopo Ponticelli

Northwestern University - Kellogg School of Management

Andrea Tesei

Queen Mary University of London - School of Economics and Finance; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute); London School of Economics & Political Science (LSE) - Centre for Economic Performance (CEP)

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Date Written: August 2019

Abstract

Farmers in developing countries often lack access to timely and reliable information about modern technologies that are essential to improve agricultural productivity. The recent diffusion of mobile phones has the potential to overcome these barriers by making information available to those previously unconnected. In this paper we study the effect of mobile phone network expansion in rural India on adoption of high yielding variety seeds and chemical fertilizers. Our empirical strategy exploits geographical variation in the construction of mobile phone towers under a large government program targeting areas without existing coverage. To explore the role of mobile phones in mitigating information frictions we analyze the content of 1.4 million phone calls made by farmers to a major call center for agricultural advice. Farmers seek advice on which seed varieties and fertilizers better meet their needs and how to use them. We find that areas receiving mobile phone coverage experience higher adoption of these technologies. We also observe that farmers are often unaware of the eligibility criteria and loan terms offered by subsidized credit programs. Consistently, we find that areas receiving mobile phone coverage experience higher take-up of agricultural credit.

Keywords: agriculture, Credit Card, HYV Seeds, India

JEL Classification: E51, G21, Q16

Suggested Citation

Gupta, Apoorv and Ponticelli, Jacopo and Tesei, Andrea, Technology Adoption and Access to Credit via Mobile Phones (August 2019). CEPR Discussion Paper No. DP13956, Available at SSRN: https://ssrn.com/abstract=3464480

Apoorv Gupta (Contact Author)

Dartmouth College ( email )

Department of Sociology
Hanover, NH 03755
United States

Jacopo Ponticelli

Northwestern University - Kellogg School of Management ( email )

2001 Sheridan Road
Evanston, IL 60208
United States

Andrea Tesei

Queen Mary University of London - School of Economics and Finance ( email )

Lincoln's Inn Fields
Mile End Rd.
London, E1 4NS
United Kingdom

Centre for Economic Policy Research (CEPR)

London
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

London School of Economics & Political Science (LSE) - Centre for Economic Performance (CEP)

Houghton Street
London WC2A 2AE
United Kingdom

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