Monday, April 27, 2015

How "the Poor" Account: Financial Reckoning and its Cosmoeconomics in Assam, India (Part One)

By IMTFI Researcher Sean Dowdy

A Forest of Accounts

The puzzle is one of sheer efflorescence: why do the Mayongians of Central Assam (Northeast India), with whom I conducted ethnographic fieldwork for over two years, keep so many accounts, financial and otherwise? In Mayong—a kingdom/village cluster on the Southern bank of the Brahmaputra, renowned for a tradition of sorcery—accounts are everywhere. Numeric and narrative, they are at the communicative heart of economy, ritual, political authority, and history. Accounts are kept of one’s life, name and death; of sorcery, kingship and kinship; of collecting bamboo from the forest and of harvesting rice from the floodplains. Almost every action or event of value (economic or otherwise) has an account attached to it. Such accounts are records, to be sure. But they are also artful arguments about how a social relationship is to be remembered, stored, accessed, mobilized, manipulated—how it is told and retold, hidden and revealed. I would contend that this abundance of accounts not only says something about Mayongian history and society in particular. It also allows us to refine our understanding of accounting in general.

Figure 1: A replica and translation of an entry in a daily cash ledger.
Note that in the ledger entry itself, there is no mention of what was sold, a date for transactions, or names associated with the transactions. Nor, does the ledger show a carry over amount from how much existing cash on hand was held in deposit from previous transactions.

Basic knowledge of accounting has long been considered the key to prosperity—whether one is managing a business or a household. Yet, in using accounting training as a key method of poverty alleviation, initiatives for financial inclusion or rural development have tended to obscure existing strategies as well as non-economic modes of reckoning that poor populations in non-Western contexts mobilize to manage and manipulate their economic lives.

By focusing on the logics, techniques, and technologies of accounting for cash and cashless transactions (such as debts, gifts, commodities, barter, and livestock redistribution) my research explores how and why Mayongians symbolically manage finances at the intersections between cosmology and socio-economic life—between forces of spiritual and socially mediated material prosperity, and between the part-whole dynamics that objectify activities of payment and exchange. Doing so opens up an ethnographically driven, and holistically attuned, theoretical space to explore how and why a people account—not only for economic reality but also to each other as a moral practice.

Talk of “accounts” (hisap) dominates many aspects of life in Mayong. People speak of “accounting” both literally and metaphorically. In Axomiya, hisap can mean narration, calculation, counting, equivalence, tidiness, management, or sufficiency depending on context. But the term has a tropic value flooded with moral and poetic valence, as in “Bhaiti, hisapot solabi!” (“Little brother, act with calculation!” literally: “Little brother, move within the account”).

Single-entry cash ledgers (hisapor kitap / tokar bohi) are perhaps the most common (if least ubiquitous) means of financial reckoning. Every household keeps these on hand—usually packed away in chests, or stuffed into the hollows of bamboo pillars (sunga / chunga) that support a house. They often rot away, and are rarely consulted, unless an emergency happens. A sudden loss of income, for example, might compel a search for an old debt that could be collected. For households, they serve as means for tracing expenses and income collectively and individually. The basic procedure is one of rolling a credit (joma) over at the end of every list of transactions, to be put against the next set of expenses or income. Yet, in most individual cash ledgers, methods of rolling over credits or tracking deposits are not always followed strictly or carefully (see Figure 1).

A slip of paper here, a notebook there, all cluttered with loosely traced amounts and minimal details might suggest a haphazard approach to financial reckoning. But, this minimalism is far from haphazard. Every time I had a chance to look through a household ledger, I was asked not to photograph anything in it. When I asked why, I was told that household ledgers are secretive (surang; moni-moni). Here we must be very careful to not smuggle in our own moral associations about why certain kinds of economic knowledge are secretive. Indeed, as I asked repeatedly why these cash ledgers are kept secret, the tone of dialogue consistently turned toward the solemn and subdued, rather then the defensive and possessive.

Put quite elegantly by my friend Saritra Biswas, “Eito ‘Jadu Mayong’, surang hisapot solabo lagibo.” (This is “Magic Mayong,” you must move within the account discreetly.” Or “This is “Magic Mayong,” you must move in a discreetly calculated way”).

Saritra would often chastise me for talking too much about accounts and money, advising me to not bother with others’ accounts, but always keep track of my own—simply, inconspicuously, and committing as much to memory as possible. Indeed, ledger entries like the one in Figure 1 are talked about as mnemonic devices—simple ways to remember a transaction in ways one wants or needs them to be remembered. However, it is never wise to write down too much. The record of one’s livelihood is always potentially at risk—often from the threat of sorcery. These kinds of accounts I call “secret accounts.” These household ledgers are quite distinct in form and content from the ledgers that publicly circulate, or what I call “shared accounts.”

Shared accounts are open to public audit and inspection. They are neither minimalist nor hidden, but elaborate, expository, liturgical, and even sometimes double entry. Within these accounts fines accrued from the breaking of taboos are reckoned, expenditures from ceremonies, marriages, mortuary rites, and name-giving rites recorded, and the circulation and redistribution of livestock carefully tracked. All of these accounts are public (raijor hisap). For an example of this kind of account, see Figure 2.

Figure 2: A page torn from a ledger that accounts for fines assessed, collected, and redistributed from male members of a patriline during a marriage ritual. The tearing was the result of a disagreement about certain fines—it was reinserted into the ledger after the dispute was settled. These fines mark a mandatory 20 Rs. fee to be paid to the purse of the Raij  (the “public” here meaning the politically organized society of Karbi people in Burha Mayong). Each of the fines recorded here are categorized as a biya (marriage) fine, meaning that a minor taboo had been broken during the nuptial arrangements (usually that a certain ritual was not followed properly, or that a marriage arrangement was not properly sanctified by the Karbi village chief [bangthai] and the priest [kathar])

The analytical distinction I am making between “shared” and “secret” accounts (more on these to follow in my forthcoming blog posts) is an ethnographically driven one. Mayongians make distinctions between particular kinds of accounts on a token-by-token basis, and sometimes as a typological distinction between accounts of discretion and accounts of public audit. In my next blog post I will turn to the qualities and implications of this distinction between secret and shared accounts, a distinction that can also be nullified when we consider these accounts as modes of historiography. 

Friday, April 24, 2015

Interactive Voice Response a Tool in Citizenship Participation
Jonathan Donner, a member of IMTFI's external advisory board, has a new paper out in collaboration with Preeti Mudliar on Interactive Voice Response use in India. Details of the paper can be found on Donner's blog. The archival version is available here, behind the Sage paywall. A ‘pre-publication’ version is hosted right here.

In Donner's second study of CGNET's Swara platform (the first can be found here), a citizen journalism software, the team take a phenomenological approach to look at user-interaction in rural India. Results of the study suggest that the platform can provide an alternative media tool to mainstream channels, that users tend to be social activists, and that users have different interpretations of what they are dealing with: "Not only does the technology represented by the features of the IVR convince them that they are being heard, but their conviction also extends to who they think is listening to them."

Monday, April 20, 2015

Consumer Finance Research: Global Approches and Methods (Part 3) - Decoupling financial inclusion and well-being: A case study from Haiti

By Erin Taylor and Gawain Lynch

Financial inclusion and well-being are core issues for most professionals working in the area of consumer finance. This is especially true since the Global Financial Crisis. Governments are investing more in research and programs on consumer protection issues, and banks are infusing their communications with emphases on well-being at work and at home.

A Western Union office opens in Anse-à-Pitres in 2010. Photo by Erin B. Taylor.
How can we tell if people are financially included, or have satisfactory levels of well-being? This difficult research problem has been tackled by hundreds, if not thousands, of professionals. They have developed definitions, scales, measurements, and questionnaires to arrive at an answer.

But this data does not speak for itself. Qualitative techniques in complement to quantitative measures and indicators (which our toolkit will be showcasing) can greatly improve our understanding of how inclusion and well-being diverge. Let me explain by taking a tour through our research on money in Haiti.

A case study from Haiti

In June 2010, five months after the earthquake that devastated Port-au-Prince and its surrounding areas, I began researching financial practices in Haiti along with Heather Horst and Espelencia Baptiste. There were plans afoot to launch mobile money services there, and we were asked to assess how people were currently using financial services and mobile phones. After mobile money was launched, we returned again to see how people were adapting to it.

Mobile money, while a commercial service, is often introduced into countries with the aim of improving financial inclusion. The idea is that having access to formal financial services will have a positive effect on well-being. But is this really the case?

When financial inclusion improves well-being

To a certain extent, the answer is “absolutely.” While people who are “unbanked” often have access to a vast array of informal financial services, sometimes these are not enough. Formal services are often cheaper, more reliable, and more flexible. They give people a greater range of choices, helping them to organize their finances in ways that contribute to their well-being - and often in ways that we might not expect.
Bag Contents - This interviewee carries Dominican pesos
and his phone with a mobile money account. He does not
have a bank account. He sometimes uses Western Union
when clients send him money to do odd jobs such as
paying their bills or doing their shopping.
Photo by Erin B. Taylor
For example, one young man we knew well, Emmanuel, lives in Anse-à-Pitres on the border of Haiti and the Dominican Republic. We interviewed Emmanuel and followed him as he worked and socialized. We also conducted a “portable kit study” in which we asked him to talk about the possessions he carries on a daily basis, including his wallet, any bank cards, his phone, and documents. This combination of techniques helped us to construct a picture of the financial services and interactions he carries out in his daily life.

Emmanuel signed up for mobile money so that a cousin of his, who lives eighty kilometers away in Jacmel, could send him money to pay her Sky television bill across the border in the Dominican Republic.

In this case, her financial inclusion was not as a person attempting to escape poverty, but as a consumer whose payments were made more efficient through this new technology. Previously, she had sent the money for free via a fleet of fishing boats that travel from Marigot (near Jacmel) to Anse-à-Pitres twice per week on Mondays and Fridays, which are market days on the border.

“Financial inclusion” enhanced Emmanuel’s and his cousin’s well-being by saving them time and effort. While this may not seem like a major advantage of financial inclusion, time and effort in fact carry a heavy social cost because they interfere with people's abilities to devote themselves to core activities such as earning a living, looking after families, and relaxing.

When access doesn't guarantee use

In contrast, people can have a reasonable level of well-being without formal financial inclusion. Even when people have access to financial services, the transaction costs in using them can be a deterrent.
Money changers in the binational market on the border
 of Haiti and the Dominican Republic. Photo by Erin B. Taylor

For example, David has been a resident of Anse-à-Pitres since 2002. He has family in Port-au-Prince, Santo Domingo, and the United States. Because he works for the United Nations base in Anse-à-Pitres as a translator, he has an account with Scotiabank in Jacmel. He can use his Visa card to withdraw money “from any ATM around the world,” but in fact he rarely uses formal financial services at all.

Instead, he uses the local boat service to send money to his children who are studying in Jacmel. He sends 500 gourdes once per month to pay for their daily living expenses, plus extra money at the beginning of the school semester for fees and uniforms. The boat service may be slow, but David is not in any particular rush.

Learning to use a new service, and teaching his family how to use it, poses economic costs and transaction costs, and he does not consider the efficiency gains made to be worth the effort.

When access is not enough

Yet other people technically have access to financial services, but do not have sufficient resources to make use of them. Here the problem of insufficient income is more important than transaction costs.
Goods waiting to be loaded onto the boats that travel
 twice-weekly between Anse-à-Pitres and Marigot, Haiti.
Photo by Erin B. Taylor
Nicolas, for example, also lives on the border of Haiti and the Dominican Republic. He has a wife and two school-aged children, and he earns US$30 per week carting goods, baggage, and people onto the boats that travel between Anse-à-Pitres and Marigot. He earns just enough money to feed himself and his family. He is three months behind on rent payments for his house, and when we spoke with him he could not travel to find better work because he was ill.

Before the earthquake in January 2010, Nicolas sometimes received money from his relatives in Port-au-Prince via both the informal boat service and the formal Western Union office. Few transaction costs blocked his use: the services were located in the center of his town, and he had sufficient time during working hours to visit them.

However, he has not received any assistance since because he has not been able to contact his relatives. He has no phone or even spare money to buy a calling card so that he can borrow someone else’s phone. He is very stressed because he does not even know if they survived:

“The earthquake killed a lot of people in Port-au-Prince, and I don’t know if my relatives are alive or dead. I had my uncle’s telephone number but I lost it. I want to go past the house of a neighbor here who knows well how to use the telephone, but I have no money to give him.” (Nicolas, Anse-à-Pitres, July 2010).”

Nicolas has essentially become “un-serviced” as his fortunes have changed. His case is a telling reminder of how, for the poor, financial inclusion does not just depend upon access and literacy, but also on receiving a minimum income to remain a customer.

Defining a research question

A major benefit of in-depth qualitative research is that it provides ways to identify these kinds of variations and help researchers decide which variables are important. These can then inform the design and use of quantitative methods, such as surveys or mapping, to understand broad patterns or structural barriers. Qualitative research can also assist in interpreting and telling a story about large data sets even after they have been generated.

Using qualitative techniques can be essential in defining what financial inclusion or well-being might mean in a given case. Few people are actually financially excluded: instead, they use a range of informal services of different kinds and qualities, and may already have access to formal services even if they don’t always use them—like David.

As recent discussions in the financial inclusion space are signaling, a robust research design should attend more to the quality of accounts—how they are used or not used, and to what ends. And for a case like Nicolas’s, we need to be aware that financial inclusion doesn’t just mean having access to financial services, but also the resources to take advantage of them.

Money and its management help us to achieve our social goals as much as our physical and practical ones. This point is demonstrated well in the work of Woldmariam Mesfin, who examined the impact of new technologies on payments systems in Ethiopia. Mesfin’s observations in Ethiopia demonstrate the centrality of monetary transactions to social well-being. Giving money to relatives and community members for everyday and ritual purposes is an important way to practice group belonging.

In fact, one could argue that this social financial inclusion — the ability to participate in group financial activities — is more important than access to formal financial services, because it contributes more to well-being. As Ana Echeverry notes:

“Financial inclusion is not about government and the banking system designing how to get people to open more bank accounts,” she said. “It is about how I interact with other human beings, how I make my transactions with you.”

Defining financial inclusion by using a more sophisticated suite of tools and techniques, from household savings-to-debt ratios to object centered analysis of money ecologies, can recouple the terms by suggesting whether and how financial inclusion may enhance well-being.

The toolkit that we will be building over the next few months will help you in this and other tasks by explaining how different methods can be applied specifically to consumer finance research. In the meantime, you can keep an eye on the IMTFI blog for more updates and releases.

Friday, April 17, 2015

Migration and Worker Fatalities Abroad

New book out by IMTFI researcher Ahsan Ullah

"In recent years, the alarming number of fatalities among migrant workers has stirred up much controversy. Most of the migrants were from countries in the Middle East and South East Asia, and their deaths were the results of unhealthy food habits, mental stress and dangerous working conditions. However, these fatalities are also due to flaws in the policies of the governments of both origin and destination. This book investigates acts of cruelty and abuse against migrant workers which were perpetrated by their employers. The authors argue that migrant workers are often powerless and unprotected by national laws, unearthing new truths on migrant workers as significant economic players.

Palgrave Macmillan Press
"The incidents of deaths of migrant workers in the recent years are raising serious questions about the security issues and living standards of migrant workers in host countries. However, there is scarcity of systematic research to look into this fact. There are contradicting opinion about the causes of death. The dead bodies carry a death certificate saying that cardiac arrest is the cause for the death while relatives receiving dead bodies at the airport found marks of torture at different parts of the body. In order to explore deeper into the phenomenon, we conducted a research in both destination and origin countries. This research confirms that the cause of their death is not merely cardiac arrest. This book recommends that the safety of the migrant workers should be ensured (from both sides) before migrants set off for the destination countries.

"In the last decade the number of deaths of migrant workers overseas has alarmingly increased. Complaints are many. Relatives receiving dead bodies at the airport found marks of torture at different parts of the body. These deaths are not natural ones. Most of the dead bodies arrived from Middle Eastern countries. Cardiologists generally claim acute tension caused by uncertainties of income and unhealthy working conditions and food habits may lead to deaths. This books delves into the fact the fact to answer why fatalities of migrant workers happen.

"This book captures events of cruelty and abuse towards the migrants workers perpetrated by their employers. This book records the level of their defenselessness and unearths a new truth about the migrant workers—significant economic players. This book is an effort to rekindle and strengthen hope for the potential migrants and their families, and to generate collective consciousness about the exploitation and dangerous working condition abroad. Scientists and researchers from all branches of social sciences and policy makers will benefit from this book."

See more on Ahsan's project: Unknown remittances of the migrants died abroad: A study on the recovery and dynamics of usage of remittances.

Monday, April 13, 2015

Bitcoins, blockchains, and bolstering e-payments: Cryptocurrencies and the future of financial research and development

By Bill Maurer and Taylor C. Nelms

On April 2, a group of academics and payments industry experts convened at the University of California, Irvine under the aegis of the Institute for Money, Technology and Financial Inclusion to discuss the present and future state of cryptocurrency research and development for money, payment, law, and more. The Director of IMTFI and UCI’s Dean of Social Sciences Bill Maurer discussed his new National Science Foundation-supported research project, and Donncha Kavanagh (Professor of Information and Organization at University College, Dublin, who heads the project "Coding Value: New Money for the Digital Society") and Mic Bowman (Principal Engineer at Intel Labs) both reported on their respective teams’ ongoing research. Those physically in attendance were joined online by a group of scholars from University College, Dublin, and elsewhere.

When Bitcoin—the distributed, open-source, online network for transferring value—was first introduced in the late-2000s, it was talked about as a new kind of money. But as the ecosystem of institutions and services has evolved around it, Bitcoin itself has changed: rather than as money, Bitcoin is now often talked about as a payment system or, even more broadly, as an infrastructure or protocol for a variety of legal or law-like activities, from notarization to title management. Participants at the IMTFI convening discussed the implications of these changes for contemporary challenges in the worlds of payment, finance, law, and international development. These included: microtransactions, identity management, notarization, auditing, and G2P payments (including for internally displaced persons).

A blockchain is a distributed database containing records of all transactions taking place in the system of which it is a part. It is not controlled by any central authority, but is instead verified by the network of peers sustaining it. In this way, it depends on a community of users in order to function. This makes it robust, and also lends it several advantages over traditional payment services. Already, startups like Bitpesa and developers like Kipochi are exploring the use of blockchain systems for remittances, as well as ways into integrate mobile money systems like M-Pesa. Participants discussed the possibility of blockchain-type systems (Bitcoin or otherwise) working to create digital liquidity for those people living a cash-only existence. Participants were especially interested in the potential role of such systems in developing world contexts lacking built-out electronic payments infrastructure.

The question of infrastructure, however, loomed large: without electricity and Internet access, blockchain systems are impossible to sustain. Participants at the convening also discussed the challenges to community due to increasing centralization of Bitcoin transaction verification by an ever-diminishing number of “miners” (now about 6,000; projected to decline to around 3,000) and large, consolidated “mining pools” (9 of which control 78% of market share as of 4/11/15).

Participants also discussed the potential of blockchain systems to solve low-level legal problems of great significance in the global South, such as land titling and property registration, as well as delivering foreign aid. The “public ledger” qualities of blockchain systems may hold potential here, even more than in the money transfer domain.

Thursday, April 9, 2015

Making Academic Research for Financial Inclusion Actionable

IMTFI Fellow Anke Schwittay has posted an idea showcasing IMTFI's workshop process in OpenIdeo, an open innovation platform for the challenge "How might we use the power of communities to financially empower those who need it most?", it is co-sponsored by CO-OP Financial Services and MasterCard.

"As a university researcher and educator in anthropology and international development, I am interested in how academic work can be made actionable.

I think the Institute for Money, Technology and Financial Inclusion (IMTFI) at the University of California Irvine, which is funded by the Gates Foundation, presents a very good model for academic, industry, policy and civil society collaborations.

IMTFI funds researchers, predominantly from the Global South, to conduct qualitative research into poor people’s everyday innovations with mobile money. Its premise is that only through an in-depth understanding of the complexities of marginalized groups’ financial lives, and the way in which these groups adapt financial services such as mobile money to their own needs, can workable and scalable solutions be found. Over the years, IMTFI has funded 6 cohorts of Fellows working in all parts of the world (for full disclosure, I was part of the very first cohort of Fellows).

IMTFI has also used design as a way to make its knowledge actionable. Every year, it hosts a conference bringing everybody together, where it runs workshops and brainstorming sessions. It has published a  set of design principles and a report on warning signs for digital client uptake. Because it operates according to an open source model, everything is available to the public and people in industry and policy circles often make use of IMTFI’s findings."

Wednesday, April 8, 2015

Top 5 Customer Insights from CGAP’s work in Human-Centered Design

By Claudia McKay, Yanina Seltzer

In the past three years as CGAP has tried using human-centered design (HCD) to learn from and design better products and services for customers, we have visited fishing villages in Indonesia, talked to traders on the streets of Kumasi, and visited hundreds of agents. We have had coffee at people’s homes, observed religious ceremonies, and talked to local leaders about community planning for weddings.
See more over at their website.

One of the most powerful things about HCD is that it uncovers people-level insights that have systems-level impact. By having intense conversations with hundreds of low-income people across emerging markets, CGAP developed an understanding of their financial aspira­tions, fears, and mindsets. These in turn produced thousands of data points which were the first step in a chain of events:

- We distilled the data points into representative patterns;
- The patterns prompted creative brainstorming sessions;
- The brainstorming sessions led to hundreds of concepts for potential financial products and services;
- The concepts resulted in iterative prototypes.

Finally, at the end of this process, we arrived at financial products and services ready to be deployed in the market. These insights about people’s lives and behavior – the “data points”- are central to the design process. We were surprised by how consistent and similar the insights were throughout the 8 markets we worked in. Here are some of the top critical customer insights we learned from across our projects:

Cash works. It’s all about control. “With cash you can’t spend what you don’t have,” said Sueli in Brazil. Globally, cash is one thing that people understand and trust. It provides limits, and seeing what is left over after spending leads people to make better financial decisions. Cash works seamlessly for daily transactions and people are already used to transacting with it.

Communities pool resources for financial and emotional support. We hear this consistently; low-income people feel more comfortable investing in their communities and their neighbors, because they know they will have a built-in support system in their own time of need. Most communities already have informal financial services groups, groups that integrate easily into people’s lives and offer functional, financial, emotional, and community support. People know that if they give a gift for a friend’s wedding or funeral, they will eventually be repaid in one form or another.

Find out more.