Thursday, October 8, 2015

From Eko Headquarters to Mobile Money Agents: IMTFI Opens an Account

Continuing on with IMTFI’s March 2015 visit to do an update on a selection of research projects in India, Liz Losh and IMTFI postdoctoral scholar Mrinalini Tankha meet with Eko.

In a LEED-certified building in the Gurgaon District, a tech hub in the outskirts of India's capital, are the offices of Eko, a financial services partner for mobile money collaborating with institutions like the State Bank of India. Co-founder and COO Abhinav Sinha and Associate Amith Kaushik Tanneru sat down with IMTFI to talk about the rapidly shifting economic environment of the country and how start-up culture is attempting to challenge some longstanding norms of entrepreneurship in the country. Sinha recalls with amusement how he and his brother CEO Abhishek Sinha had founded the company as a classic garage operation in September of 2007 in a house converted into an office. As a part of his preparation for launching his company, after acquiring his engineering degree Abhishek honed his skills at 6d Technologies, a telecommunications company. It was also the place where he had an epiphany about how recharging funds in a cell phone might be similar to making deposits with the phone as a vehicle. He soon persuaded his brother Abhinav to quit his job at Oracle and join him at the firm. Currently the company the brothers founded boasts about four million subscribers serviced by an agent network of about 3,500 agents in thirteen states.

Like other mobile money providers, Eko, a business that was launched with less than a half million dollars initially faced the daunting challenge of adapting to negative cash flows or -- as Sinha puts it -- "earnings sucks" that lead company principals to forgo salaries in the early months. Nonetheless, they maintained faith in the principle that as prepaid telephony on the retail level outgrew the scratch-card-to-recharge model and converted to electronic systems, other opportunities would emerge. As Sinha observed, "In 2000-2007 the entire world went through this change, and the project was successful.  But what if rather than use the word 'recharge,' it could be seen as nothing else but a deposit transaction." By using their engineering acumen they knew it was possible to coordinate "a similar backend to the mobile network operator and a similar backend to the bank."

A recent GSMA report on mobile money for the unbanked indicates continuing appetite for these services worldwide, as the global customer base has grown to 100 million after a dramatic 40% increase in use. Sinha notes that even if it was "impossible for banks to go to 70% of the country, banks would also be able to leverage it, and it could scale pretty nicely and bring banking to the next 500-700 million people, even if it won’t happen through bank branches and ATMs as it did for the first 200 million people."  He noted that if one bank branch could be expected to service 1,000 customers, the 20,000 customers per branch ratio in India could not deliver effective services. At the same time analysis included in a November 2014 CRISIL report, "Rural banking: stronger business case," has predicted that rural branches of public sector banks will "turn profitable in the next five years," particularly as business correspondents manage "customer interaction at a fifteenth of the transaction cost of a typical rural branch," because branch personnel draw the same salaries as they would in urban areas, and the establishments themselves run higher transaction costs than their urban counterparts.  

Sinha's optimism is also fueled by the development of AADHAAR cards derived from biometric unique identifiers that potentially make it much easier for providers of financial services to comply with so-called "know your customer"(KYC) regulations. This is strengthened by the fact that opening a telecom account is much easier than opening a bank account. India was a country with a large number of migrant workers, struggling with the vagaries of current address vs. permanent addresses. Sinha described the frustrations faced by a driver who might walk into a branch with the intent of opening an account and only to be told that "without ID proof they can't help you." Even if such a driver would have a voting card, the address would likely be "back home" rather than in cosmopolitan Delhi. In contrast, Sinha explained, "a permanent address is enough for a SIM card."

Just as IMTFI researchers have considered how agent quality contributes to success, Eko is concerned with having knowledgeable, trustworthy, and approachable intermediaries. Sinha characterized agent selection as a "fairly scientific process" aimed at finding shopkeepers for whom Eko could be "the best provider in the earning basket." Those who "don't own the shop or the place where they live" might be less desirable candidates, and customers also seemed likely to prefer married agents for their perceived stability. The educational level of the person should also be appropriate, according to Sinha, often someone who has matriculated from 10th grade but not a college educated postgraduate.   

"We used to go through extensive classroom programs, because agents wouldn’t have computers or smartphones. With smarter devices, it is easier for us to train." Sinha recounted how the company now used a range of delivery systems for training, including YouTube, Facebook, text notifications, and other "electronic and paperless ways of training guys," although they remained mindful of "education level with handling and adopting new technology." Often access to new technologies made it possible for agents to keep those in headquarters apprised of "what’s not working," by sharing pictures of branding at shops or failed transaction IDs. Cost-free cross-platform messaging services, such as WhatsApp might enable rapid problem solving, although even as they were "adopting new tools," agents were generally networking with higher-ups "not sharing knowledge with each other."  Low-cost Android devices also had additional benefits for agents who might otherwise be unable to provide services when unpredictable power grids failed. Social media also have potential to help Eko grow, if a contented customer is likely to "tell ten of his friends."

Although smarter devices allowed many data mining opportunities, Sinha was mindful of "provisions on protection of data, we don’t share customer date with any third parties," he asserted, and "not every employee can access the data, because of our security and authentication system."  Given the nature of financial transactions, data protection is critical for PIN security at the customer level as well, although long PIN codes could frustrate adoption. Sinha lauded the company's approach to "dumb-down authentication" with a patented technology in which numbers would be transposed on color coded sheets.

Despite continuing problems with illiteracy Sinha contends that "everybody is number literate; everybody understands numbers." He described how at the company's inception in 2007 "we packed our bags and went to a village." Rather than rely on a "majority says so" approach to design, the team focused on a fundamental question: "What do you do with the mobile phone?” He described how the villagers in Bihar "knew how to switch on and off the phone, and they all knew how to dial a number."  They also seemed "able to count currencies." 

With the Reserve Bank of India preparing to issue licenses for payment banks, Sinha feels that "regulations have been in the right direction," particularly in an industry in which there is "no business model," and "everyone is losing money." He noted that part of the problem in the traditional banking model that was the privileging of elite customers which made financial inclusion seem " ‘upside down’, because you need many people to do less funds." 

According to Sinha "business correspondents working under the shadow of a bank" have less flexibility to develop " ‘customer-centric products,’ we understand customers and the right product." For example, he pointed out that "Holi is this Friday but the company can't offer a 'Holi bonanza' for two days, which could mean 10,000 more customers because a bank’s products don’t change the pricing. The only changes happen at board meetings." He also worried that financial inclusion "targets negative incentives" for banking institutions are unlikely to investigate dormant or zero balance accounts or to take action on the "availability of acceptance," as when the RuPay card is introduced in an environment in which there are "no machines to swipe it." 

Attracting top engineering talent to the mobile money industry could also pose future obstacles, Sinha admitted, given the comparatively robust success of e-commerce in comparison to the more marginally profitable work in the sector Eko occupies. "Flipkart is a 10 billion dollar plus company!" he exclaimed.  "Because the opportunity is bigger, FINO should have been a billion dollar company by today." Nonetheless he remains optimistic, particularly with deregulation going in the "right direction," a phrase he repeated several times in the course of the interview. If in the future a company like Eko could offer credit, he predicted more product adoption and more "aspiring" and "acquiring" customers. As one of the "fundamental pillars" credit services would foster new partnerships and exploration of new business models. Sinha asserted that smarter technologies would eventually aid the industry as much as higher volumes of transactions would and noted that it would also help to supplant the agent-centric paradigm that drained profits. For the present, of course, he emphasized that agents continued to be central to Eko's business.

Sinha and Tanneru referred us to two successful proprietors to see for ourselves how the retail functions of the business operate. Our first visit was to a family-run business where each member handled a different part of the customer flow: a daughter handling the paper registry, a son manning the laptop, and a wife opening new accounts and handling PIN transactions. The manager of the operation lamented the recent downturn in construction that had impacted his business, but there was a steady stream of customers during our visit. 

Using her Indian ID card and cell number, IMTFI postdoctoral scholar Mrinalini Tankha opened her own Eko account. 

Near the metro station of the enormous Cyber City development another Eko operator was doing a brisk business that day from a desktop computer at the register. Unlike the first Eko operator we visited, he had a more diversified storefront, because he had added Eko products to his electrical hardware business. Because his inventory of goods required him to extend credit, he liked the stability of the Eko business, although he was mindful of competitors. He seemed to have a more affluent customer base than the first agent with more people in line wielding smartphones although they seemed similarly anxious standing in the queue as the ones at the first set-up. We noticed a customers ask the operator to hurry with the transaction as it was a case of emergency for him.

[Photo Credit: Elizabeth Losh]

Wednesday, October 7, 2015

Balancing Optimism and Realism: Dan Radcliffe of the Gates Foundation

As a part of IMTFI’s March 2015 visit to India for an update on a selection of research projects, Liz Losh and IMTFI postdoctoral scholar Mrinalini Tankha stopped by the local Bill & Melinda Gates Foundation office in Delhi to interview Dan Radcliffe.

For Dan Radcliffe, Senior Program Officer for Financial Service for the Poor at the Bill & Melinda Gates Foundation, the key terms to know about financial inclusion in India right now are: 1) Pradhan Mantri Jan-Dhan Yogana (Prime Minister’s People Money Scheme or PMJDY), an enormous national initiative with a mission to ensure access to financial services in an affordable manner, and 2) Payments Banks, a special category of a no-frills bank that can take deposits and remittances but are not allowed to lend. The guidelines for this new type of bank has been set up by the Reserve Bank of India (RBI) and 11 firms were recently granted licenses. (For a discussion on whether or not India’s Central Bank got it right, read CGAP here).

In the interview, Radcliffe recounted how he became interested in global approaches to technology and poverty and described how after earning a degree in economics at UCLA, he had begun his career at the Venture Capital Unit (at the now defunct investment bank Lehman Brothers). After leaving Lehman, Dan went abroad to teach English internationally, an experience which ultimately inspired him to study development finance at Harvard's Kennedy School.

Dan along with Kabir Kumar, who works at the Consultative Group to Assist the Poor (CGAP), writes on the CGAP blog about how 2015 is a "big year" for financial inclusion in India, the challenges to achieving universal digital financial inclusion in the country, and the conditions for helping payment banks to succeed

Over the past few years, the Gates Foundation has been evolving its financial inclusion strategy. Dan recalls that when he began his tenure at Gates, "the Foundation’s strategy at the time" had a "savings focus." This was logical given that the approach was geared to "crack the proximity problem of financial inclusion, because customers are not going to walk more than a kilometer to deposit their surplus income from the day." Over time, the Foundation began to view "savings as one of many applications that sit on top of a digital payments infrastructure." Hence, the Foundation’s current strategy focused on expanding digital payment connectivity in poor and rural areas and then driving a broad range of financial services over those payment platforms.

Now that the model of digital financial inclusion has expanded away from an exclusive focus on savings, Dan points out that "the applications are quite extensive," particularly regarding "questions of governance and corruption.” He cited Lant Prichett, the Kennedy School professor whose works often discusse the disconnect between policymakers in New Delhi and the local officials. (For further reading, see Prichett's work on how India might be a "flailing state" here.)

Dan emphasizes that digital payment connections create an opportunity to directly link the government at New Delhi with India’s vast citizenry, securely bypassing a range of intermediaries who tend to siphon off funds and other services intended for the poor. "With the rollout of Jan Dhan, Modi sees this as a way to revamp how India delivers fuel, fertilizer, and food subsidies. Rather than offer generalized price subsidies, the Modi government aims to directly transfer the cash equivalent of those subsidies into bank accounts… It is very exciting at the moment, because the government is situating digital financial inclusion around a broader narrative about public services and how to use it to restructure public service delivery which is not limited to mere digitizing of payment flows." These digital payment connections, he notes would enable the providers to have an opportunity to apply behavioral economics and would lead them to "offer services and tools that help people overcome cognitive biases."  For example, Radcliffe examines a scenario in which a government transfer recipient might be able to easily select a percentage of the inflows and direct those inflows into a long-term savings account. Similarly, the Indian government is trying to incentivize citizens to conduct digital transactions at local stores. Here, it could garner lessons from Slovakia which, in order to fight tax evasion, allows citizens to enter their receipts online in a monthly national tax lottery to win cash prizes or a new car.

All in all, Radcliffe has been happy with how the financial inclusion situation has evolved in India over the past few years. He cites four key regulatory reforms in particular: First, the Reserve Bank of India has introduced Payments Banks regulations which permit non-banks with deep distribution expertise to offer payments and deposit accounts on their own. Second, the RBI has eliminated the 30KM rule in which you couldn’t set up an agent more than 30KM from that institution’s nearest bank branch, leveling the playing field between large and small banks with regards to agent banking. Third, the RBI has provided some flexibility in its Know Your Customer (KYC) regulations, allowing customers to provide proof of current address or proof of permanent address (rather than both). Fourth, India’s telecoms regulator has made the USSD channel universally accessible by any provider, promoting the net neutrality standpoint.

[Photo Credit: Elizabeth Losh]

Monday, October 5, 2015

Revisiting IMTFI Researchers: Rickshaw Pullers in Delhi with Mani Nandhi

In March of 2015 IMTFI arranged for a comprehensive visit to India to gather updates on four of their sponsored research projects, introduction can be found here. This first of the four case studies takes a look at rickshaw pullers in Delhi with Mani Nandhi. 

For IMTFI researcher Mani Nandhi, the first research questions about the rickshaw pullers of Delhi grew out of her own personal experiences with a rickshaw puller. "When I went out of my colony – to go shopping, to go to the bank – I didn't have much time, so I took the rickshaw. I came to ask him questions about his background, and why he came to this work, and I learned about the rickshaw pullers’ lives, the harsh conditions, and why they migrate here. In some ways, it’s the easiest occupation to take. There’s no entry barrier. You just had to be taken to the contractor and pay the hiring charges for the day.” Trained as an economist Nandhi also manages the administrative responsibilities as a department head at the Department of Commerce at Jesus and Mary College in New Delhi. Her commitment to studying financial inclusion has always been driven by human interests.

According to statistics there are about 8-9 million rickshaw pullers in India. Out of these, only one million hold licenses, and fewer than 10% of those in the occupation own the rickshaws that they cycle. Despite the country's rapid modernizing, human-powered transportation remains an important part of urban living, particularly to fill in the gaps in existing public transportation of bus lines and metro networks.

As I travel with Nandhi to a rickshaw pullers’ camp, I notice the obvious affection they have for her. They mostly call her by the familiar but respectful “Auntie” (rather than the more usual and impersonal "ma'am" or "madam"). There is considerable laughter, joking, empathy, and personal attention in the interactions as Nandhi inquiries about particular men, some of whom are back at their villages and some of whom have been in trouble with the law. The conditions in which the men live in the encampment indicated their marginal economic status, even though government-funded toilets had introduced improved hygiene conditions in the camp, and the men were diligent about sweeping garbage out of our way and shooing away feral dogs.

As Nandhi explained, “I started at Microfinance Research Alliance, and we were asked to apply for IMTFI funding . . . It suddenly struck me that I have a very important segment, which we could study – with interesting demographic profiles, ways of saving, and financial practices. I knew the group of pullers who would stay outside my colony. I was chatting with them when I was preparing my abstract, learning about their informal practices, how there was no easy option to remit.”

Like other IMTFI researchers in India, Nandhi emphasized the importance of doing qualitative as well as quantitative research. "In my pilot study I had a very long questionnaire and two research surveyors. I decided on areas that I had to explore, areas that I could get pullers for my sample. In my test questionnaire – where I found problems – I got to know about remittance channels, including about the Eko channel, in which money has to be collected."

"They used the hawala channel to send money," Nandhi said, referring to a pre-digital system of money transfer popular among Muslims, "but it was impossible for them to let me explore this particular area. It was definitely an eye-opening experience, the underground channel. They said, 'yes, you come in the evening,' or 'he will come early morning at seven.' But nobody ever came. It was impossible to break through. There is some kind of fear factor, for obvious reasons. There are entire transactions to be done, and that’s the best way of ensuring that money reaches their houses." (For more about IMTFI research on the hawala channel for sending money home, see the IMTFI research of Amrit Pal.)

"The pullers had many different strategies. One of these pullers would stay in the open space so he could hire out a room once a year when his wife came to stay with him. 'I won’t be saving money if I rent a room.' By being an open squatter, he could save on money to be used for his family. People who are illiterate -- with no means of support, no government support -- look after money very well." As a savings strategy she described how they would also bury money in polyethylene bags at uninhabited parts of their camp.

The IMTFI visiting team observed many forms of economic activity as we accompanied Nandhi making her rounds among the pullers she considered "orphans" from society. Within the seemingly chaotic environment of the camp, there were shops that sold small items and beverages, a barber shop, an eatery. There was even a stall for selling colors for the upcoming festival of Holi. As we moved around the camp, we came across surprising ways in which money circulated through a variety of payment flows.

The camp holy man showed us a selection of talismans and coins from the temple, which included a U.S. quarter among his collection of currency.

Nandhi also described arrangements that some of the men made with local shopkeepers who served as depositors for their savings. This helped them to protect it from losing them to someone who might squander away their savings in gambling or alcohol binges. "They sleep outside the shop," Nandhi explained, "the shopkeeper has a system" in which the puller provides security for the proprietor, and the money kept is recorded in a small diary. "The men say, 'I don’t get the interest. But at a bank I cannot open an account. I need an ID card.'"

Nandhi described how the pullers often feel excluded from the bank and how they don’t tend to see it as a public resource to which they have access. "They are not allowed into banking outlets. Lower level employees are not facilitators in that sense. Bankers at the top level, they are keen; they understand." Although executives understand the imperative for financial inclusion, "it is at the ground level where sensitivity training is needed," according to Nandhi. She described banking officers who used their own experiences in places like East Bihar to confirm their own negative stereotypes and who would even accuse the pullers of lying. "They are poor," she lamented. "It’s like a bigger vehicle who hits a smaller vehicle and says they are too blame. You are small. I am big. I am powerful." Banking hours and banking holidays could also be obstacles to pullers.

It is also worth noting that banks require proof of identification for opening accounts. Among the acceptable identification document for opening an account is the the biometric ID cards issued by the AADHAAR system which requires clear fingerprinting as a way to identify an individual.The heavy labor of maintaining these vehicles often wear the fingerprints in the hands of the rickshaw pullers and makes them illegible to the technology and debars them from acquiring their unique AADHAAR number, once again prohibiting possible access to banking facilities.

The other major factor that makes informal channels preferable is the question of access to credit. (In Africa, innovative experiments with providing credit to those in the informal sector using mobile money systems are being analyzed by IMTFI researchers studying M-shwari and the Jua Kali in Kenya.)  "Unless there is access to credit, access to payment alone is not enough. They can’t get credit from the formal banking system."

Moreover cash may be insecure for these men, but so is maintaining control over cell phones and biometric cards. Nonetheless, she described an increase in ATM card use among the very poor despite suspicions that government involvement might lead to unwelcome forms of oversight, because if the government "started this account" tied to debit card use, it could also use electronic banking records as a means for surveilling unreported income. After all, as Nandhi observed, "90 percent of the population is migrants, and everyone is able to make money one way or the other." Financial inclusion even with intense hand-holding can be difficult to attain. In her second study in 2012, she described how the initial group of 75 was soon whittled down to 50 participants, and ultimately only 13 became banked despite energetic efforts.

In our visit to the pullers’ camp with Nandhi we met a contractor who manages to control much of the men’s economic lives. He provides "loans, the rickshaw, gambling, entertainment, the store, the attraction of urban living, an escape from harsh reality in village, their livelihood, their opportunities."He was polite in the presence of visitors and showed us the record books in which he recorded his daily transactions with his men. She described what she called the "loan trap" in which many of the men are confined and how they are economically constrained by perpetually owing to the contractor, who might bring them from the village by the dozens, although they pay their own travel expenses.

"One of important insights, which I have stated in my study, was expressed by a puller: 'Madam, when you come, we feel motivated to think of saving, and after you leave, we go about our daily routine and the thoughts of saving is far removed.'" Nandhi argued that two things should be prioritized: "a champion like a bank motivator to keep in touch with them, as is done in the microfinance model, where a motivator goes around the group members to reinforce the benefits of the group and savings and other benefits of being in self-help groups" and "a savings collection financial product akin to a piggy bank scheme." She argued that her own experiments with having pullers deposit small sums indicated the potential for larger scale success, and she cited the Syndicate Bank Pigmy Deposit Scheme as a possible model. She wanted to see this approach combined with doorstep collection at the location of a pullers' temporary or permanent abode, because even small distances to bank services could be large obstacles. "If top policymakers could agree to introduce this kind of program compulsorily in some public sector banks in an experimental manner, it would be a test for motivating the poor to deposit."

She countered the misconception that the poor "don't like technology" by explaining how they adopt technologies selectively and according to their own personal needs. In the camp we could see that some rickshaw pullers had even acquired more expensive "smart" phones, which could be a powerful mobile communication channel with access to global networks of information, data storage, and the ability to document their financial and personal lives. Nandhi had her own smartphone with her and discussed the benefits and drawbacks of the device with one of the men.

She also explained how less formal cybercafe spaces -- which kept later hours and maintained fewer class barriers -- could be an important part of financial inclusion, particularly for completing first steps in becoming banked, such as acquiring an AADHAAR card. She noted that "RBI [Reserve Bank of India] is supposed to have digital literacy" as well as financial literacy training. (For more on financial literacy training in India, see the research of IMTFI researcher Deepti KC and Mudita Tiwari.) Unfortunately agents have more incentives to promote remittances than to promote saving.

As a rhetorician, I found the end of our interview particularly moving. In her commitment to the cause of the rickshaw pullers, Nandhi still had energy despite coming to the end of a twelve-hour day. She became especially animated as she described her frustrations about reaching policymakers with her message. The changes that she is arguing for implementing involve relatively modest costs, and some initiatives should cost almost nothing other than a modest outlay for training in techniques. Nandhi insists that the sensitivity and civility that she models in simple interactions with the pullers could lower barriers to financial inclusion dramatically. She has written a book, The Urban Poor & Their Money published by Pinnacle Learning, illustrated with photographs from her first study in 2009-10 that personalizes the rickshaw pullers by presenting them as individuals to make her case to policy makers. Yet she feels that they often turn a deaf ear to her pleas for empathy for the poor.

"A little more than a year ago, I was invited to participate by someone from the UNDP (United Nations Development Programme) for a discussion on pullers. It was a small group of 6-7 men who were associated with -- the Rickshaw Bank Project, a rickshaw manufacturing unit, NGOs, etc. One gentleman had got a contract from I think the World Bank to produce a status paper with policy recommendations on pullers in a month to be presented in international fora. I participated in the discussion but the sense I got created unease in me, because the purpose of meeting was to rapidly scan data to arrive at findings. When I did venture to suggest that the time is not adequate enough, I knew my suggestion was considered unworthy to take note of. Though I was asked to be a member of a working group, I knew I would not be informed and never was called for it. It rankled me not because I was not called, but because it was not going to be fruitful for the large majority of pullers. I do intend to persist, but one needs the networks to connect with, something I do not have. I shall have to do something, just to feel that my research findings could open up possibilities for the pullers."

[Photo Credit: Carolyn Ledlie]

Revisiting IMTFI Researchers: Introducing the 2015 India Field Report

An IMTFI blog series in India by Liz Losh

(Seated left to right: Mani Nandhi, Liz Losh, Mrinalini Tankha)
In March of 2015 IMTFI arranged for a comprehensive visit to India to gather updates on four of their sponsored research projects. These four case studies examined a broad range of financial inclusion issues for specific targeted populations that differed by region, gender, and occupation. These studies included in-depth long-term field work with Delhi rickshaw pullers, rural women in Bihar, fishermen in Kerala, and silk workers in Karnakata.

As an observer, I was conscious of visiting the country at a time of dramatic changes. The government of Prime Minister, Narendra Modi had promised the country twenty-first century foundational technological transformations: biometric authentification, big data government, smart cities, mobile money, branchless banking, digital markets, shortened supply chains, and disintermediation of all kinds.

Although many of the research subjects participating in IMTFI studies often had access to cell phones and other communication technologies, and some maintained bank accounts, the access was uneven, and literacy gaps often played a role. In this context, empowerment efforts could have unintended consequences, the loss of local intermediaries was often mourned, and many reasons existed for people to prefer the informal sector over the formal one.

For many years now, I have covered the annual IMTFI conference as one of their official bloggers. This involves sitting in an air conditioned conference center at a high-tech research university in front of my laptop and trying to synthesize the statistics, diagrams, and photographs in the rapid-fire presentations to create stories that both accurately reflect the claims of the scholarship and emphasize the human interest questions that the yearly gathering of researchers raise. As one of the co-facilitators of FemTechNet, a research hub for scholars of technology whose work is informed by feminist theory, I thought I understood the material, the embodied, emotional, labor-intensive, and situated character of interactions with money and technology. However, to a certain extent, from the vantage point of the university, I could only vaguely comprehend the IMTFI research in a mostly abstract way. Of course, these researchers based in the Global South, who had overcome visa hurdles and jet lag to get to UC Irvine were people I had gotten to know a bit over the years. But I was only familiar with them in their roles as accomplished and articulate scholars. I didn't have the opportunity to see their empathy, humor, introspection, curiosity, frustration, and generosity as human beings until I traveled to the places where they did their field research.  

During my visit, I spent time with four remarkable women who were IMTFI Fellows and principal investigators. Among them were a human rights advocate and journalist who was serving as a research assistant to one of the PIs (see her "What I Learned in India" for more), a postdoctoral scholar based at IMTFI who grew up in Delhi, two female photographers, and eight field surveyors. It was an almost entirely female group that represented many different disciplines: anthropology, engineering, political economy, marketing, sociology, design, journalism, and nonprofit administration. I visited researchers in field sites, offices, and conference cities all over the country. I shooed away dogs and goats, ran across highways rumbling with trucks, tromped down mud paths inaccessible to automobiles, shuttled through mazes of back alleys and side yards, and navigated around industrial, animal, and human waste. I tried to be attentive and at the same time was anxious to avoid the possibility of disrupting the trust that the researchers had built with their subjects, sometimes over the course of many years.

Liz Losh with Nithya Joseph at the silk factory

I had been to India before -- to do research on hashtag activism in the wake of the notorious 2012 Delhi rape case, but much of that time had been spent in the familiar territory of college campuses, think tanks, and NGO offices. Visiting people who earned less than a dollar a day made me reflect on the ways that I could accept the food and hospitality they offered without further sapping family resources. Initially I probably also worried excessively about food safety issues, but I soon learned to follow the lead of my guides who always treated their informants with respect, friendship, and warmth. I was also privileged to see them in action, problem solving and formulating new research questions as new situations emerged. So it was an exciting intellectual environment as well. The fact that the IMTFI investment continues to pay off, sometimes years down the road, was particularly striking. From my perspective, the researches that these women are contributing to the field appears to be highly original, nuanced, practically applicable, and often counter to received wisdom.

This series of stories represents the work of Mani Nandhi on rickshaw pullers in Delhi, Deepti KC and Vanya Mehta on rural women in Bihar, Janaki Srinivasan on fishermen in Kerala, and Nithya Joseph on silk workers in Karnataka. These stories describe very specific places and people, but I have tried to do so in ways that protect the privacy, dignity, and consent of participants. By offering portraits of these five researchers and their subjects, I hope to contribute in a very small way to broaden the public policy conversation about development, money, and technology to honor the labor of these inspiring women.

The stories will be published within a 6-part blog series over the next three weeks through the IMTFI Blog starting today, stay tuned~

Blogpost 1: "Rickshaw Pullers in Delhi with Mani Nandhi"

Thursday, October 1, 2015

FarmVille and the Role of ICTs in Agricultural Savings and Loan Programmes in the Philippines

By IMTFI researcher, Allerine Isles

FarmVille inspired infographic
This blog post presents some of my research findings through a FarmVille inspired info graphic. In it I compare the rules and features of the game to actual practices of savings, loan repayment and provision of government technical assistance for agriculture and farm improvement in the Philippines. FarmVille was introduced on Facebook in 2009 as an online farming simulation social network game that teaches players to use available resources for generating maximum farm productivity. It requires the players to be involved in different farm management activities such as planting, plowing, growing and harvesting crops and trees, and raising livestock. FarmVille’s popularity soared on Facebook between 2009 and 2011 and appears to have contributed significantly to an awareness on aspects of farm management among online gamers all over the world.

The game is available free to players but in order to progress quickly to higher levels in the game, the players have to amass Farm Coins, an income they can earn through activities within the game that include tending to their farm and harvesting crops or by spending Farm Cash which can be purchased in real-world currency. Farm Coins and Farm Cash are the two in-game currencies and the greater the amount of this “money” the farmer has, the larger her/his purchasing power in the “market” where items (such as seeds, trees and animals, decorations, buildings and a massive range of other items) can be purchased using these currencies. The use of coins and cash, alongside acts of social capital (neighborly work and gift exchange) provide the main mechanism for in-game activity which frames social engagement between the players while also providing the crossover between virtual and real currency exchange in FarmVille.

The research project was concerned with conducting an impact study of agriculture information communications technology (ICT) on savings and loan repayment in the Philippines among research grantees of the Microfinance Innovation Center for Resources and Alternatives (MICRA) and Economic Social and Cultural Rights-Asia (ESCR Asia) through two microfinance institutions (MFIs) in Sarangani and Cebu provinces for the period 2012 to 2014. Both the MFIs under consideration had existing micro agriculture loan programs or agri-based rural micro enterprise promotion programmes and mobile banking facilities for its members at the time of the study. In this infographic using FarmVille images, I visualize the findings from the province of Sarangani over the two years. The infographic shows that during this period the number of female and male farmer respondents were almost the same at 51%, 49% in 2012 and 52%, 48% in 2014. Their status as married, widowed, single and separated also did not change significantly in the two years. In both 2012 and 2014 the majority of farm improvements were sourced from personal cash. However, in 2014 there was a marked 17% increase in government subsidy even as the loans from informal lenders/financiers increased from 12% in 2012 to 19% in 2014. As the graph on the bottom left hand side of the inforgraphic presents, in 2012, medical expenses were ranked highest in spending priorities and socials and gadgets were prioritized the least in both years. In 2014, savings, small business, and tuition became top priorities along with medical expenditures.

Broader Research Findings 

A 2011 study conducted by MICRA Philippines for Mercy Corps on Small Holder Farmers showed that farmers' access to credit depended on their location. In this project it was observed that access to ICT services, household savings and repayment capacity did not correlated to whether the area was wealthy or poor.

Sarangani is among the poorest provinces in the country and Cebu features among the more advanced cities in the country. In Sarangani, the MFI clients registered 75% willingness to deposit and withdraw cash through mobile banking while at Cebu the MFI registered a much lower willingness at 48%. This shows that farmers access ICT services, inclination to save and make repayments depends not so much on their location but on their willingness to use mobile phone technologies.

 Farmers need human intermediaries to facilitate the learning process and actual use of ICT services. Even though the MFI in Cebu had a history of capacity building around mobile banking, a large number of its farmer client base was not as willing to use mobile phones to save and make credit repayments. The MFI in Sarangani on the other hand, had farmer clients that were already users of ATM services and were graduates of the Farmer Field School (FFS) trainings conducted by the Department of Agriculture (DA) that promoted agriculture extension services through e-Agriculture. As respondents in Sarangani become more aware of the benefits of mobile banking through the farmer field school and MMPC information campaign, there was an increase in MMCP clients’ willingness to deposit and withdraw cash through mobile from 75% to 83%.

The respondents with P5,000 and above average monthly income were mostly willing to deposit and withdraw cash using mobile phones. Income level was a key determinant in loan repayment capacity and willingness to use mobile phones. The MFI in Sarangani had a P5,000 average monthly income as minimum criteria for availing the loans which was maintained and even increased loan repayment performance.

FarmVille Comparisons

In FarmVille, there are several informational features and applications that assist and enable players to progress to higher levels of farm productivity. For instance, players can avail of agricultural technical assistance that is featured in the form of cold storage warehouse facility, registration/enlistment to some technical services, certification and clearances that help them to gear up to the next stage of agricultural technical assistance like provision of credit, marketing and facilities among others. FarmVille also has a “Help Center” where tips and guides are posted for players’ information and reference. In the actual world, MFIs can be critical in educating farmer clients and increasing exposure on the use of the technology and further developing farmer entrepreneurship through ICT services. Thus, agricultural technical services can be further developed in collaboration with the MFIs as another income generating  activity and “handholding” assistance for the farmers that would ensure their productivity and ultimately loan repayment capabilities and lead to increase in savings. This study, thereby notes that in order to be more effective the MFI needs to emulate ideas from FarmVille in order to facilitate the learning process and actual use of ICT services and mobile banking in social practice.

A fun platform like FarmVille has also demonstrated the technological capacity to spread awareness regarding various aspects of farm management. Similar ICT initiatives can be utilized for MFI capacity building initiatives whose impact will trickle down to the farmers. “Sachet information” can be sent out to farmer mobile users to increase their capacity in agriculture extension services at a faster pace and lesser cost. For instance, the International Rice Research Institute (IRRI) launched the Crop Manager application through which it sent customized crop and nutrient recommendations to farmers.  The use of ICT services in educating today’s youth on the benefits and prospects of farming also allows them to understands basic principles of savings and loan repayment by which they can earn their living and further invest in farm improvement.

Wednesday, September 23, 2015

Reimagining Rurality in Mobile Money Times: Life, Identity, and Community in Southern Uganda (Part 2)

By IMTFI Researcher Prince Karakire Guma

In my previous blog post, I showed how mobile money is not only meeting the needs and demands across demographically diverse populations in my study – wealthy and poor, young and old, male and female, rural and urban participants. It is also reinforcing new forms of interaction between them. I showed how mobile money has considerably affected – and become a fundamental part of  – everyday life. People who are registered with mobile money accounts are able to “connect to all,” enhancing and maintaining their pre-existing kin ties and friendships, as well as ways of communing, collaborating, and networking. In this part of the post, I seek to present exemplary cases of the broader impact of mobile money and its importance for notions of rurality in parts of Southern Uganda.

One reality that constitutes a great part of reality of the rural in parts of Southern Uganda is the belief system of “obuntubulamu.” Obuntubuamu presumes that an individual does not and cannot exist alone but owes existence to the village and/or community. It is a system that simply recognizes the usefulness of community-centeredness. What makes the mobile money application ideal in this case is that it is not perceived as a threat to such ingrained and indigenous ideals, notions, and realities of the community. Instead, mobile money is the kind of application that is taken up by one so s/he is able to live on with their lives just as they did before it existed.

For example, many women have experienced subtle reforms in daily life, family life, community, and networks. Women describe a better life as the ability to be a good family, community and social person. They seem contented with the idea of being in small family groups in which they could express their opinions, concerns, and wishes. Besides, they claim to dress better, eat better, decorate their houses and take much better care of their gardens and animals. As the cashier of a local affirmative group argued:

"Before mobile money, we were left behind and excluded. Today with access to phones and money, we feel included. We feel empowered. We are even able to save up to cope up with droughts, disasters, and times of crisis through our networks that are now closer with mobile money. In times of crisis and need, I think it is a great system. Once we have got texts on the mobile phone, we can get the money immediately from our kin. There is no need to travel long distances."(Gift, 2014 interview)

Phones have intensified the kinship system in the rural. Such symbolic fields as kinship and rituals represent dominant practices and enduring meaning structures that cannot be ignored by the rural residents nor overlooked when interpreting village life. Especially important is the idea of gifting up and down generations in rural Uganda. Younger people give to parents, grandparents and other close kin in their parents' generation. This way, mobile money is able to enhance inherent informal risk sharing networks. Most users in Southern Uganda use it to support friends, family and relatives. It is a method for social gifting, and sometimes contributing to ceremonies and social rituals and functions.

Sending money is closely connected to practices of chatting or texting. Mobile money transfers between the urban and rural dwellers almost always follow a chat, a text message, a beep (or intentional "missed-call"), or a call between the two. Mobile money in Uganda has acquired an etiquette that is often followed when using the mobile phone. Participants often indicated that they commonly used their gadgets to maintain relationships through sending money, airtime, and similar gifts.

Women have increasingly formed self-help groups supported and sustained by mobile phone applications such as mobile money. One group that had benefited greatly from using mobile money among its services was the "Responsible Motherhood Savings Group." Members explained to me that they didn't have to worry about carrying money, carrying cash in bulk or standing in long bank cues to buy checks. Besides the tangible benefits, mobile money services have enhanced a community spirit as well as collective action among these women, reinforcing the feeling of community among members of the village. When one of the members faced a challenge, everyone in the group gave their individual contributions, sometimes through mobile money. Members argued that through mobile applications such as mobile money, they felt closer to each other than before—they were transparent amongst themselves and more connected. Through mobile money services people were able to care for each other and engage in each other’s lives.

Unlike in the urban where it is sometimes about class, convenience, networking, and just merely the position of the consumer, rural residents were motivated to adopt mobile money only then when they were sure that the emergent ways were better than the ones they had. Whatever mobile applications were used in a community and locality, it was because of its ability to solve something for the individual, for a group, for a community, or the entire village. From my observations, applications were appreciated for nothing else than their ability to solve a genuine problem that they faced.

Particularly interesting is the experience of one health-worker who said she had not returned to her home village since her father died in 1998. She said she no longer had any reason to come back just to pay homage to an almost "empty" village. However, when she finally traveled to the village over fifteen years later, she realized how much the rural had changed and explained how she has been making plans to settle and set up a mobile clinic there to make good use of mobile money applications (and be able to save) in the village.

In another interesting narrative, one herdsman excitedly told me how with his smart phone he will take a picture of a sick cow and explain to his boss the details about what and where the problem is. He will then receive money for its treatment through mobile money, or be advised to sell it in the market. He immediately sends profits over to his boss through mobile money. As the LC 1 Chairperson for the village confidently added, "today, the village is not just for the poor, the old or the sick; it is clear from the mobile phones that communication and the frequent use of mobile money are getting people out of the circle of total poverty." From these and similar responses it was possible to read the enlightenment on the faces of the participants as they pointed out how educated and financially-abled people they had become.

However, with the urbanization of African villages, the rural is losing much of its idealistic image. This is so much so that the rural is emerging as a model of "modernity."It is no longer that space of completely intact evergreen forests and arable lands. Due to globalization and rural-urban/urban-rural travels, there are many urban-like changes happening through use and uptake of mobile money services.

Even for businesses in the private sector – like the MNOs, banks and financial institutions – the rural is increasingly becoming a more dynamic and competitive environment. Infrastructural changes and the presence of mobile services are increasingly influencing lifestyles and in turn necessitating new models of survival. More connectivity has meant more access to infrastructural facilities, and ultimately, transformations in the conventional image of rural life and rurality. In many ways the rural is emerging as a global, dynamic, multi-faceted territory such that rural life is being re/shaped, re/drawn, re/constructed, and generally transformed.

While many embrace these changes, some residents see it as a danger. As one villager told me:

"It's just that my village is no longer the typical traditional self that it once was. I think that urbanization is beginning to have a real impact here, as the face of the city is increasingly being threatened and destroyed by these new innovations. The village is not as rural and traditional as it used to be. I do like the clean water, electricity, radio and TV, roads, cell phones, etc. But I mind that visiting it is no longer like going back in time. It’s more like a change of scenery.” (Namujju, 2014 interview)

Many rural residents were concerned about protecting, or at least paying more attention to the rural and its aspects and ideals, arguing that otherwise it would lose its identity. Rural areas should have a specific internal dynamic of changing and adapting.

Rurality in mobile money times

My study shows that mobile money is in fact proving to be integral to re-imagining rurality. However, further research is needed to show if rural elements are in fact being preserved, changed, or recreated in urban form. It is important to examine if mobile money will eventually change how we feel about rural space and if so, what its applications, services and innovations mean for rural authenticity.

For part one of Reimagining Rurality, see here

Read more in Prince Karakire Guma's final report here

Monday, September 21, 2015

Reimagining Rurality in Mobile Money Times: Life, Identity, and Community in Southern Uganda (Part 1)

By IMTFI Researcher Prince Karakire Guma

In some parts of rural Uganda, a whole village will use one or two phones to bank, to contact relatives, to share money amongst themselves, to access loans, and simply to check weather reports. Low teledensity does not imply lack of mobile money use and spread. Freed from the expense of ownership and maintenance, an individual of a particular group or community will spend longer periods of time per use on the available gadget(s), hence generating more revenue not just for the individual or group involved, but for the whole village. Such collective use by a community makes the dream for financial inclusion plausible—even a reality—for rural life.

In this 2-part blog post series I present vignettes organized around three themes—life, identity, and community—through which mobile money and rurality is re-imagined. Mobile money inclusion is providing new tools to maintain existing practices and values, reshaping but also reinvigorating rural-urban ties, and along with these, new understandings of the rural.

Rural Life, Identity, and Community in Mobile Money Times

My study provides a snapshot of the impact of the mobile financial services in rural Uganda in relation to debates on financial inclusion and empowerment. Mobile money is increasingly turning out to be a most viable tool of financial inclusion to those who have neither bank accounts nor deposit lockers nor credit cards, but do have a basic mobile phone. The Ugandan Central Bank recently cleared the path to mobile finance, a shift that forced the nation’s banks to look seriously at the low-income consumer banking market for the first time. Provoked by discussions of rurality vs. urbanity and the exclusion of remote and rural towns and villages before mobile money, I wanted to understand the extent of changes today in light of the rise of initiatives such as MTN Mobile Money (MTN), Msente (UTL), Airtel Money (Airtel), and Orange Money (Orange), which have led to the growth of an increasingly complex mobile money ecosystem that allows funds to be transferred between rural and urban subscribers. Mobile money has changed the ways of life for groups most at risk of poverty and social exclusion that often lack access to traditional bank accounts. Populations previously excluded because they do not own property or a business are beginning to get included through a myriad of mobile money innovations and applications.

With the emergence and dispersion of mobile money services in southern Uganda, 'the rural' has attained a certain kind of dynamism and fluidity, and a whole new identity through varied features of lifestyle, community, traditions and landscapes. I explore this problematic within a so-called “traditional” rural setting—still remote, excluded and poverty stricken—that is at the same time representative of emergent and transformative innovations through mobile money. I understand the rural as part of an integrated space within mobile spatial systems that delete, rub away or dis-able the aspect of distance between issuer and receiver, urban and rural, and modern and traditional. I explore how the rural territory is re-interpreted through processes, lifestyles and behaviors influenced by the new contemporary technologies of mobile financial transformations.

The setting for this study is the village communities of Masaka and Rakai comprised of households that are spread over hilly lands. Families of up to five adults and sometimes ten children live in a single homestead, which are often clusters of mud-brick and iron-roofed two or three bedroom dwellings with a sitting and dinning room, and occasionally a kitchen. Birdcages, kraals and/or gardens are reserved for subsistence crops – especially banana cultivation.

Most people have extensive kin across the corners of the village or in the neighborhoods. Given that many can trace their ancestry over five generations, the idea of family, kinship and network in such communities is profound. These are rural communities in every sense. But there are also glimmers of transformation with regard to life, community, sociality and identity.

Interviews and focus group discussions were my primary method in the two communities, along with observations of daily activities. I identified community leaders, such as local councilors, religious leaders and traditional leaders, as potential participants and used purposive sampling to ensure a full range and extent of the phenomena necessary to answering my research questions. This method of analysis allowed me to better understand the 'lived' realities of mobile innovation in the rural context in ways that challenge the discursive marginalization of communities most at risk of rural poverty and social exclusion.


The money transfer application has proved to be the most important “killer application” of mobile money, fundamentally transforming rurality in Southern Uganda. It supports the indigenous and traditional settings, realities and world-views of the Baganda who constitute about six million people, or 16.7 percent of the entire population of the country.

Before mobile (money) innovations and services, quality of life and access to social services were poor in the southern districts of Uganda. Literate rural residents exchanged information on crucial news such as serious illnesses through letters. But for the illiterate this was problematic. Letters were less informative and were often disseminated informally through trusted friends and it would often take days, weeks or even months to receive a reply. Today, calling and the use of texts or "SMS" have replaced most of the letter writing. Mobile money, which operates through text and "SMS," meets basic functionality needs and operates on the most basic handset. It takes old technology and uses it in new and innovative ways that enhance and substitute older practices of sociality, social life and lifestyles. 

Mobile money has tremendously influenced peoples’ savings behavior where previously keeping money under mattresses or in fabric, often tied in knots, was common. Now mobile phones are clearly substituting for traditional unreliable savings channels and remittance services. Where previously people only used trustees and formal institutions including banks and other financial institutions, mobile money has now made it possible to send money from urban centers to Ugandan villages through remittances at even lower transaction costs. Without having to travel long distances and cue in traditional banks, or travel across borders, rural dwellers are now able to receive money in the comfort of their homes. 

Mobile money is also substituting traditional ways of making monetary payments. Payment through agents or “middleman” have especially been substituted by mobile means of cashing in (depositing funds), cashing out (withdrawing of funds), transferring funds through person-to-person (money transfer) or purchasing of airtime, even to make payments to workers. When asked why they used mobile money, some rural residents in my study suggested that it was the appropriate alternative and substitute to unfavorable fixed and traditional ways of spending money such as cash. They said that using traditional bank accounts, credit cards and financial facilities were very complex to understand, operate, and maintain in remote villages and was often the preserve only of those wealthy enough to afford a handset. They pointed out that mobile money improved access and efficiency and simplified their lives when they needed to access goods and services. 

The sector that has benefited the most is probably education, where schools have substituted traditional means of paying tuition and other school fees – such as delivering funds in person or proxy, and use of agents such as banking institutions – with mobile alternatives. Many community schools in the region have now adopted mobile money as an acceptable means and mode of payment. They were registered with MTN and Airtel Uganda Limited where parents were allowed to transfer school fees and other school related costs for the kids. Some explained that they used electronic transaction forms for additional home goods and food items such as sugar and salt. Others used mobile money for paying utility bills for water and electricity, and salaries to their house girls or housemaids and other support staff in their homes, instead of going to the bank to withdraw cash.

Mobile money remittances exert multiplier effects on the community. For instance, they have in some cases motivated young local men and non-receiving households to start seasonal entrepreneurial activities. Before, youths used to have no choice but to leave their villages for towns and cities like Masaka, Mbarara and Kampala, so much so that there were not enough youths to work in farms and gardens. But with the fast paced changes through mobile money many are now realizing that the rural is indeed a fine place to live and work. One young man who was part of a group of young men molding mud bricks and then baking them in huge ovens to make them strong and resistant to erosion by water or rain explained how they would sell the bricks to the remittance-receiving households to build houses on their homesteads.

In fact, where non-existent infrastructure has typically stood in for the “rural” as static or cut-off from the world, it is exactly this reality that shows dynamism because it has inspired the tremendous uptake and transformation of mobile money. The absence of clear roads, accessible banks, hospitals and transport facilities in rural areas explain why a mobile phone will be popular for saving, transferring and making real-time payments. Access to health attention and remittance payments through mobile technology is a dream come true for rural residents. There was also the case of multi-nationals and NGOs coming to the village that had substituted in-person payments in cash with mobile money payments and other mobile applications to reach out to the communities and distribute emergency aid to families. 

As such, the new infrastructural concepts engineered by MNOs are not only broadening the range of transactions that target the rural poor, they are also providing dynamic substitutes making rural spaces and territories even more fluid. Such accessibility and availability means that almost everyone in every corner of the country, community and village has a story to tell about mobile money.

While the increasing number of money transfers from urban to rural territories through the mobile phone has also increased the flow of information between people in and outside the village, one consequence is that urban dwellers are increasingly keeping away from these rural localities owing to the convenience and reliability with which mobile applications provide them. According to a church priest,

"... a lot of people here come to the village when it's Christmas. They only come to the village for the seasons’ holidays. And when they come here, it’s as if there is nothing to keep them there. They leave as soon as they arrived. Mobile phones have encouraged our people in the urban not to visit at all. They have provided an easy means of communication and sending money. People no longer need to physically come here. It is as if the major motivation for people to purchase phones nowadays is so that they can avoid expenditure on travel to the village. It is as if there is no need for the inconvenience of having to make constant trips to the rural." (Sam, 2014 interview)

While some study participants worried about the changes brought by mobile money it was also clear that it was not introducing entirely new ways of life but substituting what already exists. Mobile money seems to enhance rural lifestyles of community through which people who are registered are able "connect to all" including their kin, friends and community. It provides opportunities to establish and maintain community, collaboration, and access, which I will describe in part 2 of this blog post. 

To read part 2 of Reimagining Rurality in Mobile Money Times: Life, Identity, and Community in Southern Uganda, see here.