Factors Influencing Behavioural Intention to Adopt the E-AgriFinance App Among Farmers: Extended UTAUT With Technology Readiness

Factors Influencing Behavioural Intention to Adopt the E-AgriFinance App Among Farmers: Extended UTAUT With Technology Readiness

Quistina Omar, Ching Seng Yap, Khin Than Myint, Poh Ling Ho, William Keling
Copyright: © 2022 |Pages: 17
DOI: 10.4018/IJTD.304383
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This study examines the factors influencing behavioral intention of farmers to adopt a mobile agricultural finance application called e-AgriFinance. This study develops the conceptual framework from the Unified Theory of Acceptance and Use of Technology (UTAUT) and technology readiness. Via a questionnaire survey, data were collected from 278 farmers who are producing the three major crops, namely oil palm, rubber, and cocoa in Sarawak, Malaysia. The partial least squares structural equation modeling (PLS-SEM) technique with R plspm package was employed to analyze the data. The research revealed that the motivator dimension of technology readiness affects all the four UTAUT factors: performance expectancy, effort expectancy, social influence, and facilitating conditions but the inhibitor dimension negatively affects only two factors: performance expectancy and social influence. Besides, all the four UTAUT factors are found to be positively related to farmers’ behavioral intention to adopt the e-AgriFinance app, with social influence being the relatively strongest factor.
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For many years, the agriculture industry has served as the pillar of the Malaysian economy, producing agricultural products for home consumption, and earning foreign income (Dardak, 2015). After Indonesia, Malaysia is the world's second-largest producer and exporter of palm oil (International Trade Administration, 2021). In 2020, palm oil was the most important contributor in the agriculture sector with 37.1% of the gross value added generated followed by rubber with 2.5% (Department of Statistics Malaysia, 2021). Moreover, the agriculture sector in Malaysia provided employment to 1.566 million people or 10.5% of the total lobor force in 2020 (Department of Statistics Malaysia, 2021). In this connection, digital technologies have the capability to provide economic benefits to farmers through increased connectivity (Henry, 2019). Connectivity is not only about getting information but also about receiving services. For instance, mobile banking provides smallholder farmers access to conventional financial services including deposits and loans, which are normally unavailable to them (Sunga, 2017). Besides, even though agricultural apps have been implemented in some developed and developing countries (Daum et al., 2018), an integration of agriculture and finance application is rare, especially in the context of Malaysia.

Being the largest state in Malaysia in terms of land area, Sarawak aims to ensure that no one will be left behind in the state’s overall development especially those in the rural areas (Lim, 2022). Owing to this, the Sarawak government has developed a mission to transition the state into a digital economy utilising intelligent solutions such as robotics and artificial intelligence to boost the manufacturing sector, particularly food production and modern agriculture (Ogilvy, 2017). Agriculture is one of the major areas which plays a crucial role in poverty eradication and improvement of rural livelihoods (Dardak, 2017). As a result, there is an on-going need to significantly increase the economy's growth in this area.

The Sarawak government recognises agriculture as the primary source of income for rural residents and is committed to assisting them through implementation of digital infrastructure. The farmers in Sarawak, on the other hand, face some challenges, including being widely dispersed due to the state's vast geographical area. Sarawak's rural farmers, who are dispersed around the state, can benefit from digitalisation (Sengupta and Sharma, 2019), in which rural development is limited by distance, reducing knowledge of the nature of rural poverty, and preventing rural people's access to services and amenities in or near metropolitan centres (Windle & Cramb, 1997). Furthermore, farmers rely heavily on intermediaries who act as a conduit between farmers, dealers, and final markets. Farmers' profits are likewise limited by intermediate distributors (Kundu et al., 2017). As a result, farmers may benefit from adopting mobile agricultural finance apps to communicate with one another and trade directly with marketplaces to obtain a better price by mitigating the influence of intermediaries. The digital divide and technology barriers between urban and rural areas in Sarawak have been cited as possible drivers to the country's expanding socio-economic disparity (Lai, 2018). In relation to this, the technology readiness is viewed as an important factor that affects farmers’ perception of digital technology applications and their subsequent adoption.

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