The technical architecture of the e-CNY helps explain why it can serve inclusion goals that conventional digital payments cannot. Unlike decentralized cryptocurrencies, the digital renminbi is a direct liability of the central bank, issued through a two-tier system in which the PBOC distributes the currency to commercial banks and licensed operators, who then place it in the hands of consumers and businesses. This structure preserves the role of existing financial institutions while giving the central bank a unified, state-backed digital cash instrument. The e-CNY is designed to pay for consumer retail and service transactions, civil servants’ wages, utility bills, and company-to-company exchanges, and it has been rolled out through large-scale pilots in cities including Shenzhen, Suzhou, and Shanghai, including lottery-style giveaways such as a three-million-yuan distribution in Suzhou that introduced millions of residents to the new wallet technology.

One of the most technically distinctive features of the e-CNY is its support for offline payment. In trials documented in Shenzhen, users could complete transactions in a ‘touch and pay’ mode even when neither device had network connectivity, using near-field communication between hardware wallets. This matters enormously for inclusion because network coverage, smartphone ownership, and battery life are precisely the barriers that exclude many vulnerable users from mobile payment systems. The PBOC and its corporate partners extended this logic to dedicated hardware: a ‘hard wallet’ card program was launched so that people without smartphones at all could hold and spend digital yuan, and Huawei’s Mate 40 series shipped with a built-in hardware wallet for the currency. Mu Changchun, the head of the PBOC’s digital currency research institute, has publicly framed the goal as providing an inclusive and easy-to-use digital central bank currency, a commitment the study treats as central rather than incidental to the project.

The rural dimension of this strategy is where the study’s findings become most vivid. China’s countryside has historically been underserved by bank branches, a gap that the Postal Savings Bank of China, with its vast network of rural outlets, has long worked to narrow. Pilot reporting from 2021 described tests of the digital yuan in villages, and analysts noted the introduction of a phone-free e-RMB card explicitly aimed at helping the rural poor. The policy context is the CCP’s longstanding ‘sannong’ agenda, referring to agriculture, farmers, and the rural countryside, which has made rural finance a recurring political priority. By pairing the e-CNY with card-based hardware and offline functionality, the PBOC effectively built a payment instrument that works for a farmer without a smartphone just as well as for an urban professional with the latest device.

Elderly citizens form the second major target group, and the design choices here are equally revealing. China’s aging population includes millions of people who find smartphone apps confusing or inaccessible, a problem that became acute as the country’s dominant private payment platforms made daily commerce increasingly app-dependent. The e-CNY’s hardware wallets, simple card interfaces, and offline modes offer a state-backed alternative that does not require downloading an application, managing a password, or maintaining an internet connection. The study emphasizes that the PBOC directed this design orientation during the pilot phase itself, meaning inclusion was not an afterthought bolted onto a finished product but a requirement shaping the engineering from the start. That is a notable departure from the pattern in many countries, where central banks treat inclusion as one consideration among many, and where private fintech innovation tends to serve the connected and creditworthy first.

Why would the world’s second-largest economy invest so heavily in a retail CBDC when it already has near-universal private mobile payments? Chin’s analysis points to a combination of motivations. Domestically, the e-CNY gives the state a payment rail it controls, reducing dependence on a small number of private platform companies and providing a public option in digital money. Internationally, Chinese policymakers and analysts have framed the project in terms of currency competition in the digital era and the long-term prospect of renminbi internationalization, although the study notes that the link between a retail CBDC and international currency status remains debated among Chinese economists themselves. There is also a standards dimension: China has proposed global rules for central bank digital currencies, positioning itself as a rule-shaper at the frontier of the technology rather than a follower.

The international spillovers are already visible. Hong Kong began allowing the digital yuan to be used in local shops in 2024, marking the first time the e-CNY crossed a border for everyday retail use. Chinese technology firms with deep telecommunications infrastructure across Africa have been identified by analysts as potential channels for digital currency adoption on the continent, and commentators have described China as leading Africa’s digital currency race. The Bank for International Settlements and the International Monetary Fund have both published extensive research on CBDCs as a potential new tool in the financial inclusion toolkit, and the e-CNY now serves as the most extensive real-world test case for the propositions in that literature. Agustín Carstens, the BIS general manager, has argued that the design of digital currencies touches on the very nature and soul of money, and China’s experiment is providing the empirical evidence for that debate.

The study also documents the scale and pace of adoption. PBOC governor Yi Gang reported in 2023 that e-CNY transaction volumes were seeing strong momentum, and by that point the pilots had expanded to dozens of cities across multiple provinces, covering payroll disbursements, transit, retail, and government services. The corporate ecosystem involved is broad: more than twenty companies were identified as participants in the underlying DC/EP development effort, spanning state banks, telecommunications operators, and technology firms. This public-private division of labor, in which the central bank owns the currency and the core ledger while partners build wallets, acceptance networks, and hardware, is itself a technical and institutional innovation that other central banks studying CBDC design are watching closely.

Still, the research is careful about limits and open questions. Rural adoption faces real challenges, including digital literacy gaps, merchant acceptance in low-density areas, and the persistence of cash preferences among some users, issues that Chinese industry reporting on the state of the e-CNY in rural areas has highlighted. The study does not claim that the digital yuan has solved financial exclusion, only that the PBOC has directed its design toward that goal with unusual seriousness. Whether offline cards, hardware wallets, and two-tier distribution can overcome the entrenched economics of rural banking remains to be seen, and the interplay between the e-CNY and the dominant private payment platforms is still evolving.

What the research ultimately establishes is that the global frontier of central bank digital currency is no longer theoretical. China has moved from concept to mass pilots to cross-border retail use, and it has done so with an explicit inclusion mandate for the elderly, the rural poor, and the unbanked. For the more than one hundred central banks now weighing their own digital currencies, the e-CNY offers the first large-scale demonstration that a CBDC can be engineered not just for efficiency or control, but as a deliberate instrument for bringing the financially marginalized into the formal economy. How well that engineering holds up in the villages and among the aging millions it was designed to serve will shape the next decade of monetary innovation worldwide.

Subject of Research: China's digital renminbi (e-CNY) central bank digital currency and its role in financial inclusion

Article Title: China’s ‘digital renminbi’ (e-CNY) as financial inclusion: the global frontier of central bank digital currency

Article References: Chin, G. T. (2025). China’s ‘digital renminbi’ (e-CNY) as financial inclusion: the global frontier of central bank digital currency. Global Public Policy and Governance, 5(1), 63-81. https://doi.org/10.1007/s43508-025-00112-0

Image Credits: AI Generated

DOI: 10.1007/s43508-025-00112-0

Keywords: central bank digital currency, digital renminbi, e-CNY, People's Bank of China, financial inclusion, China, offline payments, hardware wallet, rural finance, unbanked, monetary policy, fintech

Economists Ayodeji Damilola Kehinde of Obafemi Awolowo University and Abiodun Akintunde Ogundeji of the University of the Free State surveyed 240 smallholder crop farmers across four local government areas in Osun State, using a multistage sampling design drawn from registered farmer databases maintained by the Agricultural Development Programme and the Nigerian Agricultural Insurance Corporation. Their analytical weapon of choice was Cragg’s double hurdle model, an econometric framework first proposed in 1971 that deliberately breaks a single economic decision into two sequential stages. The first hurdle asks whether a farmer is willing to adopt insurance at all; the second, estimated only among those who pass the first, asks how much money that farmer is actually prepared to pay. This distinction matters because conventional single-equation models, such as the Tobit model, assume that the same underlying mechanism governs both the decision to participate and the intensity of payment, an assumption the new evidence decisively contradicts.

The portrait of the average respondent is striking. The typical farmer in the sample was about 50 years old, had accumulated 32 years of farming experience, and cultivated just 1.65 hectares of land. Nearly 91 percent were married, with an average household of five people, and three-quarters had received formal education. But the institutional connections that typically lubricate access to financial products were conspicuously thin: only 31 percent belonged to cooperative societies, a mere 17.5 percent had any contact with agricultural extension agents, and just 12.5 percent reported access to formal credit. Most tellingly, only 34 percent of respondents were even aware that agricultural insurance existed as an option.

That awareness figure may be the study’s most consequential finding. From the perspective of innovation diffusion theory, awareness is the first and most critical stage in any adoption process; farmers who do not know a product exists cannot evaluate its benefits or incorporate it into their farm management decisions. The authors attribute the information gap to weak extension services, inadequate communication channels, and limited interaction between farmers and insurance providers. Compounding the problem, most farmers in the sample exhibited low risk perception, with roughly three-quarters falling into the low-risk-awareness category. The researchers invoke behavioral risk theory to explain this pattern: people tend to underestimate low-frequency, high-impact events, particularly when they have not recently experienced severe losses. Years of successfully managing shocks through informal coping strategies, from family support networks to community risk-sharing arrangements, may breed an optimism bias that reduces the perceived need for formal protection.

When the researchers ran the first hurdle of their double hurdle model, a probit regression estimating the latent propensity to adopt, a distinctive set of factors emerged. Age and farming experience both carried negative and statistically significant coefficients, meaning older and more seasoned farmers were less likely to express willingness to adopt insurance. The authors suggest this may reflect deep familiarity with traditional risk-management practices rather than lower exposure to risk. Marital status, farm size, and access to credit all pushed in the opposite direction, increasing the probability of willingness to adopt. Married farmers face greater household financial responsibilities and therefore stronger incentives to protect farm income, while larger farms place more land, labor, and inputs at risk, raising the potential financial consequences of a single bad season. Access to credit relaxes the liquidity constraints that often make upfront premium payments impossible.

One result stands out as genuinely counterintuitive: years of formal education had a negative and significant effect on the willingness to adopt. This finding runs against a substantial body of evidence from Rwanda, Ethiopia, and elsewhere in Nigeria showing education positively associated with insurance uptake. The authors offer a subtle interpretation. More educated farmers may be better equipped to scrutinize premiums, coverage conditions, exclusions, and claim procedures, and where available products are perceived as costly, opaque, or ineffective, that critical capacity may translate into greater selectivity rather than greater demand. Crucially, the picture flips in the second hurdle: among farmers who had already expressed willingness to participate, education significantly increased the amount they were prepared to pay. Education, in other words, appears to operate differently across the two decision margins, making farmers more skeptical at the entry gate but more generous once inside.

The second hurdle, estimated with a truncated regression on the subset of willing farmers, identified five significant drivers of payment intensity: education, farm size, cooperative membership, risk perception, and insurance awareness. The cooperative effect is particularly interesting from a policy standpoint. Membership in farmer associations improves access to information through meetings, peer interactions, and collective learning, and it allows farmers to learn from the experiences of others. Evidence from China has shown that social networks can substantially increase demand for weather insurance by facilitating the transmission of insurance-related information, and the Osun State results are consistent with that mechanism. Risk perception and insurance awareness both increased the intensity of willingness to pay, underscoring that subjective assessments of danger and basic product knowledge, not just objective exposure, shape how much financial commitment farmers will make.

Diagnostic tests lend the findings credibility. Variance inflation factors averaged 2.41 and 2.38 for the first and second hurdles respectively, well below the conventional threshold of 10, and Breusch-Pagan tests found no evidence of heteroskedasticity in either equation. Both hurdle equations were jointly significant, and the authors were careful to frame the estimated coefficients as conditional associations rather than definitive causal effects, noting that variables such as credit access and insurance awareness could plausibly be correlated with unobserved farmer characteristics like intrinsic risk orientation. The study’s scope is also bounded: with only four of Osun State’s thirty local government areas sampled, the authors caution that findings should be interpreted within the study area rather than generalized to all Nigerian farming households.

The policy implications, however, travel well beyond southwestern Nigeria. Because the drivers of market entry differ from the drivers of payment intensity, insurance programs that treat demand as a single decision risk designing products that miss their target. The authors recommend bundling insurance with subsidized input packages or formal credit facilities so that premiums are covered upfront through loan disbursements, eliminating immediate liquidity constraints. They also point to mobile technology as a game changer: parametric weather-index insurance delivered through USSD and SMS platforms, with satellite remote-sensing data triggering automated payouts, could eliminate costly field inspections, accelerate claim settlement, and build the institutional trust that currently discourages participation. Cooperatives, they argue, should serve as primary distribution channels, aggregating smallholders to lower transaction costs and enable group-discounted premiums.

For a region where climate change is intensifying production risks year after year, the study’s central message is both sobering and actionable. The latent demand for agricultural insurance among Nigerian smallholders is real, but it is gated by two distinct barriers: structural constraints like credit access and farm scale that determine who enters the market, and informational and behavioral factors like risk perception and policy literacy that determine how much those entrants will invest. Unlocking the first barrier requires financial engineering; unlocking the second requires education, extension, and trust. Only by clearing both hurdles, the researchers conclude, can agricultural insurance fulfill its promise of transforming rural vulnerability into resilience.

Subject of Research: Determinants of smallholder farmers' willingness to adopt and pay for agricultural insurance in Osun State, Nigeria

Article Title: Investigating smallholder farmers’ willingness to adopt and pay for agricultural insurance policies in Osun State, Nigeria: a cragg’s double hurdle approach

Article References: Kehinde, A. D., & Ogundeji, A. A. (2026). Investigating smallholder farmers’ willingness to adopt and pay for agricultural insurance policies in Osun State, Nigeria: a cragg’s double hurdle approach. SN Social Sciences, 6(10), Article 489. https://doi.org/10.1007/s43545-026-01779-w

Image Credits: AI Generated

DOI: 10.1007/s43545-026-01779-w

Keywords: agricultural insurance, smallholder farmers, Nigeria, Cragg's double hurdle model, willingness to pay, risk perception, climate risk, cooperative membership, credit access, Osun State, crop insurance, rural finance

The scale of Nigeria’s tomato paradox is striking. The country produced an estimated 3.84 million tonnes of tomatoes in 2020 and 3.58 million tonnes in 2021 across more than 844,000 hectares, making it Africa’s second-largest producer after Egypt. Yet national yields average a mere 4 to 7 metric tonnes per hectare, compared with 38.7 tonnes in Egypt and a remarkable 78.7 tonnes in South Africa. That shortfall forces Nigeria to spend roughly 170 million dollars each year importing tomatoes to meet domestic demand, a bitter irony for a nation with fertile rainforest soils and an equatorial climate well suited to the crop.

The roots of the yield gap lie in chronic underinvestment. Fewer than 10 percent of Nigeria’s smallholder farmers have access to formal agricultural credit, and even those who do often face punishing interest rates, stringent collateral demands, and slow administrative procedures. Without reliable financing, farmers cannot purchase improved seeds, fertilizers, irrigation equipment, or post-harvest handling technology. Credit constraints also block adoption of climate-smart and risk-mitigating practices, leaving growers exposed to environmental and market shocks that can wipe out an entire season’s income.

Measuring the true effect of credit is harder than it sounds, and this is where the study makes its methodological contribution. Farmers who obtain loans are not a random sample of the farming population. They tend to be more experienced, better educated, more commercially oriented, and more willing to take risks, and these same traits independently boost productivity. A naive comparison of yields between credit users and non-users would therefore conflate the effect of money with the effect of farmer ability, producing biased estimates. The researchers tackled this problem with an endogenous treatment regression model, which jointly models the decision to access credit using a Probit regression and the resulting yield outcome in a second-stage linear regression, correcting for both observable and unobservable differences between the two groups.

The data came from a cross-sectional survey of 300 smallholder tomato farmers in Oyo and Ondo States, two prominent tomato-producing areas in Southwestern Nigeria. Using a multistage sampling design, the team randomly selected agricultural zones, local government areas, and villages, ultimately interviewing farmers across 24 rural communities during the peak cropping season between August and September 2023. The questionnaire was pretested in non-sampled communities, and reliability checks yielded a Cronbach’s alpha of 0.78, indicating acceptable internal consistency. Respondents averaged 44 years of age, 13 years of farming experience, and 3.72 hectares of farmland, with a mean tomato yield of 518.56 kilograms per hectare.

The raw differences between credit users and non-users were substantial. Farmers with credit access harvested 587.23 kilograms per hectare on average, versus 412.64 kilograms for those without, a gap of nearly 175 kilograms per hectare. Credit users were also more likely to be male, married, better educated, members of agricultural cooperatives, and connected to extension services, and they lived closer to markets. Eighty-three percent of credit users belonged to cooperatives, compared with a significantly lower share among non-users, and 79 percent of credit recipients reported access to extension services. These systematic differences confirmed that simple comparisons would be misleading, and that a rigorous correction for selection bias was essential.

After applying the endogenous treatment framework, the headline result held firm. The average treatment effect of credit access on yield was 8.229, and the average treatment effect on the treated was 8.728, both statistically significant at the 1 percent level. In practical terms, farmers who accessed credit produced roughly eight to nine times more tomatoes than they would have without it, holding other factors constant. To guard against the possibility that this finding was an artifact of one particular model, the researchers ran two robustness checks. Propensity score matching, which compares credit users with statistically similar non-users, produced an ATT of 8.514, while two-stage least squares estimation using cooperative membership, extension access, and formal education as instruments yielded a coefficient of 8.381. The convergence of all three methods strengthens the case that credit genuinely drives productivity rather than merely accompanying it.

The diagnostic tests underpinning the analysis were equally rigorous. A Wu-Hausman test rejected the assumption that credit access is exogenous, confirming that ordinary regression would have produced biased estimates. The Hansen J statistic failed to reject the validity of the instruments, and the first-stage F-statistic of 19.84 exceeded the conventional threshold for instrument strength. The first-stage Probit model also revealed who gets credit and who does not: farming experience, market proximity, extension access, and cooperative membership all increased the likelihood of obtaining loans, while older age and larger numbers of dependents reduced it. The findings expose a troubling pattern in which older farmers and households with heavy dependency burdens are systematically excluded from formal finance, and where women, who made up only 32 percent of the sample and a smaller share of credit recipients, face structural barriers to the resources that drive yields.

The mechanism linking credit to productivity is straightforward but powerful. Liquidity allows farmers to buy improved seeds, fertilizers, and agrochemicals at the right time, hire labor during critical operations, and invest in irrigation, greenhouse technology, and integrated pest management. Credit also supports post-harvest storage and transportation, reducing the spoilage that plagues perishable crops like tomatoes. Beyond the farm gate, the authors argue that expanding credit access would generate benefits across the broader farming population, not just current beneficiaries, and they frame the findings within the Sustainable Development Goals on poverty reduction and zero hunger.

The policy implications are clear. The researchers recommend strengthening extension systems, promoting cooperative membership and group lending, and designing flexible loan products with seasonal repayment schedules and lower collateral requirements tailored to smallholder realities. Gender-sensitive and age-responsive credit schemes are essential to close the productivity gaps the study documented. The authors also acknowledge limitations: the sample is confined to two states and a single crop, the cross-sectional design limits causal inference over time, and unobserved factors such as risk preferences and informal lending arrangements may still play a role. Even so, the message for Nigeria’s policymakers is hard to ignore. With the country bleeding 170 million dollars a year on tomato imports, helping smallholder farmers borrow affordably may be one of the cheapest ways to grow more food at home.

Subject of Research: The effect of agricultural credit access on tomato yield among smallholder farmers in Nigeria

Article Title: Unlocking yield potential through credit access: insights from smallholder tomato farmers in Nigeria

Article References: Kehinde, A. D., Akinola, A., & Tijani, A. (2026). Unlocking yield potential through credit access: insights from smallholder tomato farmers in Nigeria. BMC Agriculture, 2(1), Article 3. https://doi.org/10.1186/s44399-025-00025-7

Image Credits: AI Generated

DOI: 10.1186/s44399-025-00025-7

Keywords: agricultural credit, tomato yield, smallholder farmers, Nigeria, endogenous treatment regression, selection bias, propensity score matching, two-stage least squares, cooperative membership, extension services, food security, rural finance