Abstract:
The agriculture sector has continued to provide sizeable crop payouts, mainly in the form of direct cash payments across the counter and smallholders have continued to shun adopting cashless e-financial ecosystems. In Uganda, fewer than 21% of rural smallholders have bank or mobile money accounts raises questions and supports the strongest case for creating the required infrastructure and a legal framework to reduce costs and uncertainty. Smallholder tea farmers in the Kanungu district have for the last 57 years preferred direct cash payments over banks or any electronic form of payment. Between, 1966 and 2017, all smallholder crop payouts, would be in the form of direct cash. However, by the close of 2021, several smallholder tea farmers had adopted the use of digital payments, and direct cash payments, considerably declined from Ugx.4,481,074,546bn to Ugx.3,895,759/= with Ugx.5,388,278,040bn being paid digitally, of which Ugx2,887,452,150bn was paid through commercial banks, and Ugx.2,500,825,890bn, through mobile money, respectively. Digitizing payments enhances efficiency, transparency, and accountability, builds a trail of record for one's financial credit appraisal, and above all, lowers one's operation costs, along all value chains. The study aimed to assess the factors that have over time affected the use of digital payments among smallholder tea farmers in Kanungu District, Uganda. The study used a descriptive research design utilizing a quantitative approach. And, to address research objectives, descriptive and inferential statistics were used to analyze data using SPSS version 26. The correlation coefficient (-0.768) shows that there is a strong and significant negative relationship between digital payments and gross domestic product since the probability of 0.004 is less than 0.05. In other words, cash payments before the introduction of the digital payment ecosystem, constituted 86% of total payments. And now, digital ecosystem and bank payments constitute over 98%.
|