Kenya Down Payment Trial 2018
KEN -17 -1381Last modified on November 7th, 2025 at 1:41 pm
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Abstract
One Acre Fund (OAF) is an agricultural service provider that provides support for smallholder farmers in Africa to access agricultural inputs, training, and markets, to help the farmers increase their harvests and income. PxD and OAF began collaborating in 2016 on efforts to increase adoption of agricultural inputs and improve OAF operations in Kenya and Rwanda.
This trial focused on identifying SMS nudges that meaningfully increase the rates of farmers qualifying for the OAF program to receive inputs on credit. We examined early qualification, which happens when a farmer completes the down payment of 500 KES by an early date to qualify for the loan. Early down payment offers two key advantages: It helps cash-constrained farmers secure program qualification before the Christmas period, which has increased spending needs, and it extends the loan repayment timeline once farmers qualify, thus potentially improving their repayment rates.
We tested multiple SMS messaging strategies to encourage farmers to complete the down payment by an early date. Sending SMS reminders significantly increased down payment rates, compared to not sending messages. We find no meaningful differences in the effectiveness of different message framings or timing. -
Status
Completed
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Start date
Q4 Nov 2017
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End date
Q4 Dec 2017
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Experiment Location
Kenya
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Partner Organization
One Acre Fund (OAF)
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Agricultural season
Long Rains
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Experiment type
A/B test
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Sample frame / target population
OAF farmers
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Sample size
308,641
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Outcome type
Financial behavior
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Mode of data collection
Partner administrative data
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Research question(s)
1. Can SMS reminders increase the likelihood of OAF farmers meeting the mandatory down payment required for them to qualify for inputs on credit?
2. How do message framing and timing affect this likelihood? -
Research theme
Communication technology, Message framing
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Research Design
Farmers received either no message or one of six main treatments. There were several sub-treatments in several of these treatment arms.
Experimental Design:
Control: No SMS message; no framing; n = 90,000.
T1 (Basic): Basic SMS message; no framing; n = 22,500.
T2 (Benefits): Message mentions OAF benefits; framing in terms of general gain, general loss, family gain, or family loss; n = 11,250 for each type of framing (45,000 in total).
T3 (Early): Message to prepay early; framing in terms of gain, or loss; n = 11,250 for each type of framing (22,500 in total).
T4 (Small Amounts): Message to pay in small amounts; no framing; n = 22,500.
T5 (Social): Message with information on peers; framing in terms of basic information, OAF, site, or group; n = 11,250 for each type of framing (45,000 in total).
T6 (GL): Message to talk to group leader (GL); no framing; n = 22,500.Three cross-randomizations tested the message framing:
1. Deadline: Farmers received messages about the deadline after December 15.
2. Amount Remaining: Farmers received information about the amount they had left to pay out of the total down payment amount.
3. Last Reminder: Farmers received a last message that informed them that the message was the final reminder.The timing of the messages was randomized independently.
There were four main treatments for message timing:
1. Messages every week for 6 weeks.
2. Messages in weeks 1, 3, and 6.
3. Messages in weeks 4, 5, and 6.
4. Messages in weeks 1, 5, and 6. -
Results
SMS reminders sent to farmers significantly increased their eventual qualification for the OAF program by 1.7 percentage points. We do not find significant differences in effects across different message types, with the exception that the “Talk to your GL” message, which simply referred farmers to their GL, was ineffective. Including the deadline in messages significantly improved farmers’ qualification. Messages to GLs and field officers did not significantly affect qualification.
Receiving six messages had a marginally significant higher point estimate than receiving only three messages did. Treatments with three messages only were not significantly different in prepayment or qualification rates; however, receiving messages in the last three weeks resulted in farmers prepaying later, as we would expect.