Thursday, January 19, 2017

Enhancing DFS in Nigeria: the State of the Market

by Olayinka David-West, Lagos Business School

In January 2016, the Lagos Business School (LBS) launched a research project seeking evidence-based sustainable business models for the delivery of digital financial services (DFS) to the unbanked poor in Nigeria. Supported by the Bill & Melinda Gates Foundation (BMGF), this two-year initiative aims to provide evidence-based insights to support the mobile money conundrum in Nigeria as well as enhance ecosystem capacity. The initial stage of the project employed periodic industry dialogues, global expert knowledge sharing sessions, and in-depth global case studies produced by student-teams from the Pan-Atlantic University (PAU) community. These processes led to the writing of the State of the Market Report and the formation of the first ever Stakeholder Forum on DFS. The next phase of the project will focus on market-enabling policies for a thriving DFS ecosystem. This blog post summarizes the initial findings documented in the State of the Market Report.  

     For me as the team lead, this project titled "Sustainable Business Models for Delivering Digital Financial Services to Lower Income Unbanked Citizens of Nigeria" has personal significance and correlates with my broader interest--understanding the role and application of information and communications technology (ICT) in business and society. Since the mid-1990s, the Nigerian banking sub-sector has been extremely active in their adoption of ICT, capitalizing on various technologies to enhance service delivery and operations and has thus been focal to ICTs role in business and society. In 2013, I commenced scholarship with the Institute for Mobile, Technology & Financial Inclusion (IMTFI), coordinating the project on mobile money utility and financial inclusion in Nigeria and Ghana. It was a study in which my colleagues and I analyzed findings from each market and highlighted some adoption and utility contrasts between Nigeria and Ghana. In Nigeria, we empirically validated that in spite of the high mobile penetration rates, mobile money adoption and utility were exceptionally low, as a result of factors such as poor market development, trust and inadequate service delivery practices. 

      Unlike the widely recorded success of M-Pesa  and mobile money utility in Kenya, Nigeria is yet to reap similar benefits. As of 2014, 60 percent of adult Nigerians were financially served. Closing the gap to meet the national financial inclusion strategy (NFIS) target of 80 percent by 2020, would involve the acquisition of about 18 million consumers as well as contributions from all ecosystem actors. Consequently, this project is a scholarship initiative to support the achievement of the national financial inclusion strategy. In view of low mobile DFS utility, we sought to unlock insights and sustainable business models to propel mobile money operators (MMOs) in the creation and delivery of DFS to the financially excluded. 

     The consumer insights were derived from detailed analyses of multiple secondary data-sets on mobile money utility and access to finance (A2F) collected between 2008 and 2014. From the analyses, consumer profiles and value propositions of the under-banked and unbanked were articulated. On the supply side, the assets, resources and capabilities required and available to create and deliver sustainable mobile DFS to under-banked and unbanked consumers were examined. We discovered that suppliers require a complement of physical (technology, people, locations, finance and processes), human capital (competencies, partners and knowledge) and institutional (execution/leadership, competitive strategy, brand equity and culture) resources and capabilities for the effective and sustainable mobile money operations. The business model canvas highlighting the various components of the MMO business model is illustrated in Figure 1.

Figure 1: Business model canvas (BMC) for DFS.

We went a step further to dimension the spectrum of competencies, understand network (channel) management from the fast moving consumer goods (FMCG) industry and compute the cost-to-serve. We learned that MMO competencies range from technology, business, network and field service operations or management to customer support/service delivery. From FMCGs, we discovered that distribution channels are built around effective route-to-market (RTM) and trade promotion strategies. Finally, using cost- and process-based approaches, we computed average self-service and over the counter (OTC) costs. From the cost-based analysis, we estimate average self-serve and OTC costs of N132 ($0.42 ) and N604 ($1.92) respectively. Alternatively, self-service and OTC estimates from the process-based approach yield average costs of N91 ($0.29) and N172  ($0.54) respectively by using exchange rate of $1 to N314.7 for currency conversions. 


In presenting the DFS state of the market in Nigeria, we concluded with recommendations that once implemented could close industry gaps and move Nigeria closer to attaining the NFIS goals by the target date of 2020: 
  1. Build network effects: the need for demand-side economies of scale or network effects through collaborative market development.
  2. Adopt new business models: we propose either focused or specialist models or a hybrid (see Figure 2) that may be deployed nationwide or in limited geographical markets. 
  3. Alter financial model to reduce transaction costs: cost reduction suggestions include the adoption of alternative and cheaper technologies, access to patient (inexpensive) capital and the   possibility of additional revenue streams.
  4. Develop capabilities: the need of specialist capabilities in areas such as payments systems programming as well as more complex human capital and institutional capabilities are in short supply and in need of systematic and structured development. 
  5. Alter industry structures: finally, we believe that some changes to the current supply and agent industry arrangements are required to facilitate better collaboration and interoperability amongst operators.

Figure 2: Sustainable business model proposals



All through 2017, we shall extend our scholarship pursuits and focus on understanding the role of another critical ecosystem participant, the regulators and market-enabling policies for DFS. Notwithstanding, we believe that adoption of these supply-side recommendations will lead to a more vibrant DFS ecosystem as well as the attainment of the national goals and the intended benefits of financial inclusion for all Nigerians.

References:
Mobile Money Utility & Financial Inclusion: Insights from Unbanked Poor End-Users in Nigeria and Ghana by Lite J. Nartey and Olayinka David-West. IMTFI Blogpost. Nov, 15, 2015.



Tuesday, January 10, 2017

Influence of Mobile Money on Control of Productive Resources among Women Micro Entrepreneurs Participating in Table Banking in Nakuru, Kenya

IMTFI Researchers Milcah Mulu-Mutuku and Castro Ngumbu Gichuki's Final Report is available now on the ways that mobile money technology is contributing to women micro entrepreneurs' business strategies and control over productive resources in Kenya.

Dissemination workshop with women micro entrepreneurs
 and mobile money service providers in Nakuru town, Kenya
Report abstract
With mobile money technology being adopted, financial inclusion especially with regard to women and less educated is becoming a reality. In Kenya the high rate of adoption of this technology has resulted in more mobile money accounts than bank accounts. In this study we sought to determine whether mobile money usage influences control of productive resources among women micro entrepreneurs participating in table banking. The Government of the Republic of Kenya has been encouraging female entrepreneurship as one strategy of propelling the nation to the status of a newly industrialized country able to offer comfortable life to her citizens. Success in entrepreneurship is linked to control of productive resources yet this is a gendered aspect that favors men in much of the developing world. It is therefore imperative to document how women control these resources in the business context. A mixed data collection approach was adopted comprising a questionnaire administered to 392 respondents, two object-centered focus group discussions, and in-depth interviews with ten respondents. Questionnaire data were analyzed using frequencies, percentages and correlation coefficient while the rest were analyzed qualitatively. 

Important findings related to gender, discretion and control of resources
Mobile money technology has enabled women micro-entrepreneurs to control productive resources and especially business money. Results indicate that use of mobile money services influenced control of resources, especially those services that are easily integrated into existing social and business arrangements. Further investigations revealed that mobile money services have provided discreet methods of keeping business financial transactions shielded from husbands’ interferences. Interestingly, there was low usage of micro-savings and micro-credit services for table banking activities. Consequently, mobile micro-credit services had no significant relationship with control of productive resources. Qualitative data indicated that men are joining ‘women-only’ groups and are contributing new ideas and perspectives leading to investments in areas that are not traditionally for women.

Read their full report here

Their blog post on object-centered focus group discussions as a methodology to generate conversations with women micro entrepreneurs about their mobile money practices can be accessed here

Monday, January 9, 2017

“When I make sales, I want to sit and count my money at the end of the day”: Low Adoption of Digital Payment Platforms among SMEs in Ghana

by IMTFI Fellows Clement Adamba, Onallia Esther Osei, and Rebecca Sarku

"There is power and some good feeling in holding cash"
Introduction
Ghana’s informal economy is dominated by small and medium-scale enterprises (SMEs) whose huge contribution to the economy is widely acknowledged. SMEs are, however, characterized by limited application of technological innovation that could enhance business financial transactions. Current non-cash payment platforms in Ghana include switch and card, primarily operated by e-zwich, gh-linkTM; mobile or wallet money operated by big mobile telecommunication companies such as MTN, Airtel, Tigo, and Vodafone networks. There is also real-time gross settlement system (RTGS), a funds transfer system where the transfer of money or securities takes place from one bank to another on a "real time" and on a "gross" basis.

Mobile Money Vendor
Accra Central Business District
There are a limited number of SMEs using digital financial platforms for transactions despite efforts to encourage adoption and utilisation. The Bank of Ghana (BoG) has attributed the low adoption of digital payment platforms to high illiteracy and ignorance about the relevance of non-cash payment systems (BoG, 2014). In our recent study, we found that, indeed some operators of SMEs in Ghana have adopted some form of digital financial payment for personal and business transactions. Our study also confirmed that illiteracy and lack of knowledge about digital money are the two predominant factors that affect adoption and utilisation of available digital payment platforms. However, we found two other reasons that will require more than literacy to encourage patronage among SMEs in Ghana – the high value of cash and low feelings of trust.

In the remainder of this blog post we highlight some of people’s perceptions about the value or power of holding physical cash over digital money and the issue of trust expressed in the reliability of the system and its operators.


“I want to count my money…….”
There is the feeling among some SME operators that counting cash at the end of a day’s business is an indication of a good day. One is able to determine physically whether or not the day’s transaction has been good or bad. More importantly, holding money and counting it at the close of the day enhances one’s self-image and gives a positive self-feeling. In the expression of one lady in Makola, Ghana’s busiest market in the capital city of Accra, the power associated with the holding of cash supersedes digital money. The feeling of having cash in hand arouses a greater sense of liquidity, power and feeling.
Inside the Makola Annex Market

When I make my sales, at the end of the day, I want to sit down and count the money. Then, my self-esteem is enhanced. And then I also feel that I am working. But if the money is on a machine like the mobile thing we are talking about, it doesn’t make sense to me. There is power and some good feeling in holding cash [more] than there is with numbers on your phone or on a card.” (A 28-year-old female make-up kit trader in a focus group discussion in Makola, 24/3/2016).

This expression resonated among most of the participants in our study, who immediately concurred with this sentiment. In cases where people have received a mobile money transfer for example, they will immediately go and withdraw the cash.


The other problem is trust
Negative experiences of some adopters with digital payment platforms have led them to lose trust in the system, which has provided added impetus for many to completely stay away from adoption and use of digital payment platforms such as mobile money transfer services:
Adawso Roadside Market
“When I went to a vendor one time to withdraw a customer’s payment for goods that she transferred into my mobile money account, I was asked to bring my code. And I was afraid that once I tell the agent about my code, they may steal my money. Meanwhile I don’t know how to operate my phone. So as soon as I gave my code out, I withdrew everything from my account. This is because my cousin said she left GHC 200 in her account but when she went to withdraw her money, she was told that she did not have anything in it. It means that either her agent or someone took note of her code and then withdrew her money. So I prefer to have my money in cash. I know where to hide the money and not even a rat could notice it in my room. [This is better] than this code and secret number things they are talking about as a form of security for my money” (A 40-year-old fishmonger in Adawso market, 18/03/2016)

However, the distrust of the mobile money system could often be linked to misunderstandings of how the system works. For instance, some SME operators expressed concerns as to why one had to pay for registration fees and charges for transfer and withdrawal of money from mobile money vendors. Others expressed concerns about the need to pay charges for some of the most basic services. These concerns suggested that the SME operators feel exploited with fees or charges; eliciting their fear that mobile money service providers are cheating them instead of helping them with their businesses. But mobile money service agents and some platform service providers have noted that what subscribers call registration fee is actually an initial deposit for the wallet, just as it would be the case in starting a savings account with a bank.


Acknowledgement of some positives with digital financial service platforms
Notwithstanding the concerns of some SME operators about the challenges and the fact that there is the need for one to count his/her cash at the end of day, some SME operators do acknowledge some positive aspects associated with utilising a digital platform service.
mobile money advertisement in Ghana

For example, it is safe and reduces the risks of theft or robbery associated with travelling over long distances with physical money. For example, a female trader indicated that:

 “I don’t carry cash in my bag these days. At first when I travel to buy goods, we are usually attacked by armed robbers but with the mobile money technology, I usually transfer all my cash onto my mobile money wallet and then when I get to my destination, I withdraw it into physical cash to transact business. And so, even if we are attacked by robbers, they can only take my mobile phone and only a small amount of money away. Even if I lose my mobile phone, I still have my money because the code is with me” (A 32-year-old female cosmetic trader in Makola, 06/04/2016).

Another trader noted that keeping money in a mobile wallet helps to avert impulse spending:

“The benefit of keeping my money in my mobile money wallet is that when they pay me cash, it is likely that I may do an impulse buying but if the money is in my wallet it will be very difficult for me to go withdraw it. I hardly get time and if I will have to join a queue very often to withdraw money, then I will prefer that the money remains in the wallet. So it is more or less like a bank savings for me” (A 27-year-old female trader in Makola, 06/04/2016).

Conclusion
Digital payment platform designers and service providers have an obligation to educate potential users of the digital payment platforms on the suite of services that they provide.
Field Interview, Ga-Mashie
They need to spend more time on public media to educate people about the operations or workings of the digital platforms and how even illiterate users can operate these effectively without relying on any second party for support. Improved education outreach can also serve as a catalyst in reducing fears about security and the safety of wallets. Specifically, user-centered education can help people understand how to access money in their wallet as well as operate and utilize all the available packages on the platform such as buying airtime and paying bills through the mobile wallet. Platform providers need to do more to allay subscribers’ fears of risk and losing money through theft, including by agents.

Read their final report here

Tuesday, January 3, 2017

Ceremonial Expenses as Relational Savings

By Isabelle Guérin, Santosh Kumar and G. Venkatasubramanian

"Bank saving is useless." Such is the claim of the men and women we have met over the past few months in various locations across rural Tamil Nadu (South India). This is despite the Indian government's strenuous efforts to inculcate a “culture of saving” into the rural poor through a series of financial inclusion schemes.

Are we to conclude that South Indian villagers are unwilling to save, incapable of planning for the future and attracted to wastefulness and extravagance, as various early 20th century British colonial reports pondered? In rural Tamil Nadu today, most rural households have their own bank accounts, and various mechanisms have been set up to facilitate saving deposits, including business correspondents to provide doorstep services and digital finance. But bank deposit accounts remain desperately empty,1 while spending on social and religious ceremonies continues to rise. It seems that even with the demonetization, 2 bank deposits remain low for the rural poor.

Although it might be tempting to jump to the same conclusions as the British colonisers and missionaries, this would miss the point. In-depth analysis of ceremonial transactions shows a different picture, and it suggests that ceremonial transactions should be considered as a specific form of saving: relational saving.  By this we mean saving transactions that are both shaped by and constitutive of social relations.

Savings are usually conceived of as money or wealth that is put aside to be used in the event of an emergency (including health crises, job losses, theft or floods) or to prepare for the future. But in Tamil villages, money and more broadly wealth are considered as something that must circulate. The two main purposes are material assistance - formal social protection is still the privilege of the few - and social status. People do save, sometimes even considerable amounts, but the very value of savings lies in constant circulation. If people find themselves with a cash surplus, it makes more sense to them to buy gold, as we have shown elsewhere, or even to inject that cash into their social network, for instance in the form of loans, or gifts that must be reciprocated later, most notably in the case of ceremonial gifts.

Ceremony organizers keep precise accounts of gifts (see the picture below).

Photograph 1. A puberty ceremony notebook 
Source: Venkatasubramanian, 2015

Counter-gifts are not strict equivalents, but are based in complicated logic that blends redistributive rules (the better-off or socially higher-up are expected to give more generously), reciprocity (among peers), and feelings and affection (notwithstanding rank, people often give more to persons in their close circle and those with whom they want to continue a relationship).

Ceremonies and their notebooks play a key role in family calculations, long-term planning and saving strategies for various reasons. As events, ceremonies are concrete opportunities to display and give visibility to family status (mariyatai). Insofar as ceremonies involve individuals' and their families' whole relationship sets, and are largely funded by this same set of relations, they are both an expression of mariyatai and a means of building it. A ceremony's clout is measured in terms of guest number and ‘quality’, the food served, and gifts received: this all aims to maintain, or possibly upgrade or at least not downgrade the mariyatai of the organisers (and their kin).

Ceremony costs can often seem puzzling, especially in comparison to incomes, but they are closely tied to the gifts expected (from invitees). This in turn depends on what gifts the organiser has previously given.  This makes the broad set of debts and obligations contracted through ceremonies crucial to households' financial positions. Households' life-cycle positions, social networks and particular circumstances determine them to be net debtors or net creditors. Some households “save up” (gradually accumulating through regular gifts before organising their own event, see fig. 1 below), while others “save down” (organising an event and then slowly paying back), while others “save through” (a mix of the two).

Fig. 1 below shows a household that regularly saved since marriage in 2005 through regular gift-giving in its social circle, getting this partly back for the daughter's puberty wedding.

Fig. 1. Ceremonies as 'saving up'
Source: Authors
Parents with unmarried daughters most often "save down".  Sivakumar is a typical example. He first organises the puberty ceremony of his daughter. This allows him to acquire 13 sovereigns 3 of gold to be set aside for her future wedding. He will regularly have to pledge them to cover various needs and hope he won’t lose them. He will “pay back" (this is the term used) in around ten years, roughly when his daughter gets married, which will put him back into debt for many years.

We are not looking to idealise these practices. They both reflect and strengthen pre-existing inequalities on various lines. This is particularly true for gender inequalities, since the dowry counts as a significant share of wedding expenses and obviously contributes to women’s lower standing. This is also true for caste and caste inequalities, insofar as the style of upper castes and upper classes’ ceremonies tends to be the norm. Our point is that these dynamics and forms of logic cannot be ignored if we truly wish to design appropriate, fair financial services. For the moment, in the context of our study, the rural poor don’t use bank saving accounts because it goes against a vision of wealth as something that constantly circulates socially. Mobile money transfers, while still underdeveloped in rural South India, may have a more promising future.

The key question is whether the technology of digital finance could be used to fight specific forms of inequalities. Whether we like it or not, digital finance is most probably going to pervade our daily lives, even in the remotest of areas. Further research is needed to ensure that, rather than being outstripped by such developments, we can think about a variety of ways of using them to support democracy and equality.


Notes
  1 In our field area, bank account take-up was already widespread in 2010, with 91.2% households having a bank account. By 2016, take-up had risen to an even higher 97.5%. Much less had been achieved in terms of saving deposits however. The median amount remained unchanged (around 600 INR) and the average amount had even decreased (from 4470 INR to 2043 INR). Most bank accounts are in fact ‘dormant’ and mostly used as a channel for social benefits.
 2  On the 8th of November 2016, the Indian prime minister has announced that 500 and 1000 INR banknotes would be invalid after midnight of that day. Citizens have until 30 December 2016 to tender their old banknotes at any office of the RBI or any bank branch and credit the value into their respective bank accounts. The objective is to combat counterfeiting, corruption and terrorism financing.
  3 One sovereign is equal to around 8 grams of gold. It is the most common unit of measurement of gold in the region.

Read their final report here



Tuesday, December 20, 2016

Maurer named AAAS Fellow

William Maurer, Director of The Institute for Money, Technology & Financial Inclusion (IMTFI) and Dean of the School of Social Sciences, is named 2016 AAAS Fellow for noteworthy advances in the fields of law and economic anthropology, specifically in banking and the meaning of money in different cultures.


"Nine University of California, Irvine researchers in areas ranging from anthropology and psychology to computer science and biology have been named fellows of the American Association for the Advancement of Science, the world’s largest general scientific society.

'The AAAS plays an important role with the advancement of scientific research, education and outreach in the U.S.,' said Pramod Khargonekar, UCI vice chancellor for research. “These brilliant scientists – who represent a broad spectrum of academic pursuits – personify UCI’s research innovation and excellence, and we are proud of their achievements."

- Read the full article here: http://www.socsci.uci.edu/newsevents/news/2016/2016-11-21-aaas.php#sthash.l4jnnDH7.dpuf

- Save-the-Date: April 20-21, 2017. Maurer presenting at BEING MATERIAL: A symposium hosted by the MIT Center for Art, Science & Technology (CAST)


Tuesday, December 13, 2016

Banking fraud is costing the Nigerian economy dearly

A woman takes Nigerian Naira from an ATM in Lagos.
Akintunde Akinleye/Reuters
IMTFI Fellows Oludayo Tade & Oluwatosin Adeniyi of University of Ibadan in The Conversation 

"Pervasive electronic banking fraud is affecting Nigeria’s banking system and costing the Nigerian economy dearly. It is also holding back the adoption of cashless technologies and has become an obstacle to financial inclusion in Africa’s second largest economy.

Recent data shows that last year electronic fraud in the banking sector accounts for about 16% of total fraud in the industry. The implications of rampant e-fraud are enormous. People who already have a bank account are reluctant to adopt e-banking. And it’s an obstacle to drawing those who don’t have bank accounts into the formal financial system. In Nigeria only 53% of the population is in the banking system.

This has broader economic implications because e-banking is known to play a developmental role and because it allows poor people to have access to formal financial services.

Our research shows that pervasive e-fraud is also hampering Nigeria’s drive to encourage electronic transactions in a bid to reduce physical cash in the economy. The logic behind it is that less cash in the system will reduce the risk of cash related crimes, foster transparency, curb corruption and leakages and drive financial inclusion. But Nigeria’s high levels of electronic fraud is threatening the creation of a cashless ecosystem."

To read the full post, please visit: https://theconversation.com/banking-fraud-is-costing-the-nigerian-economy-dearly-68869

Read their newly published article in the Journal of Financial Crime based on their research on ATM fraud: "On the limits of trust: Characterising automated teller machine fraudsters in southwest Nigeria"


Monday, December 5, 2016

Understanding the Spread of Sports Betting in Uganda

by IMTFI Fellow Sylvan Herskowitz

A new form of sports betting has exploded over the last decade across Africa. International investors have used new technologies to offer internationally calibrated soccer odds to participants in previously unreached markets. These companies have been pouring into African markets, nowhere more quickly than in Uganda which now has 23 competing betting companies and over 1,000 betting branches spread across the country.  In every commercial center of Kampala, Uganda’s capital, newly painted signs display slogans like “They play.  You win.” and “Bet Now. Get Paid Instantly.” 


The typical betting shop consists of an open room that can accommodate between 25-50 people. At almost any time of day, young men, with whom sports betting is most popular, can be found congregating in these shops, watching TV highlights and analysis and reviewing and discussing the day’s matches in order to choose their bets. On weekends or evenings when the volume of matches is highest, patrons spill out from the shops onto the streets, discussing the evening’s matches and the bets they plan to play and hope to win.

Sports betting is a source of enjoyment for many of its participants and, for most, there is an air of excitement and hope as they place their bets. Payout sizes are similar to American scratch tickets and if you play frequently, you’re more likely to win eventually as well. Almost all regular bettors can recall a time when they won. They can tell you what they bought with those winnings and what they plan to spend their next winning on as well. Even those who themselves have never won a large sum, are able to recall a friend or acquaintance who has won a substantial amount. Most people are lured to the betting shops by a love of soccer, but the most salient feature of sports betting for its participants is the possibility of this financial payout.

In my study we began with a listing of young men, 18-40 years old, working informally around commercial centers in Kampala. In this group, we found that more than one out of three people participate in sports betting in most weeks. Even more striking, on average, these participants spend between eight and twelve percent of their weekly earnings on betting. However, bettors only win back 50-65 cents per dollar spent. For a population that sits close to the poverty line, these losses over time could have serious implications for their personal and family finances. This is understood and acknowledged by many of the participants. The majority recognize that they have lost more money than they have spent, and yet they continue to play. Furthermore, 75% of bettors report a “way to get money” as their primary reason for betting.

Demand for betting undoubtedly has many sources, enjoyment and camaraderie among participants, as well as misunderstanding and misperception of the rate of return from participation are likely important factors. My larger study attempts to examine a number of these factors. My initial analysis took bettors’ stated financial motivation for betting seriously. In particular, people in the sample appeared to have significant unmet liquidity needs. This is the result of demand for a number of readily identified large expenditures, coupled with lack of access to affordable credit and difficulty saving. In light of these constraints, the appeal of betting is amplified as an alternative way to make otherwise difficult purchases. Of course, this strategy comes at the high cost of substantial losses from participation over time.

To demonstrate the importance of this factor, I first show that winnings do affect both the likelihood and size of large expenditures that people make. This effect is particularly strong among people with limited ability to save. Second, I show that improving peoples’ ability to save with a simple savings box, like a piggy bank, reduces how much people demand betting. In addition, having bettors think about a large expenditure they would like to make leads to a considerable increase in a measure of betting demand. And finally, participants who learn from a budgeting exercise that their ability to save is better than they previously thought, reduced demand for betting. All of these findings are consistent with demand for betting resulting, in part, from unmet liquidity needs and impeded ability to save effectively for desired expenditures. Finally, an analysis of the available options for credit and saving suggest that the returns on these two alternative strategies of generating liquidity may not be significantly better than the return from betting for many people in the population. This final finding suggests that constraints on saving and credit may be pushing people towards a negative-return activity and improving peoples’ ability to save or access to affordable credit may reduce betting demand. 

In the next phase of this study, I will look at other factors leading to high betting participation including breakdowns in personal budgeting, misperceptions of the actual return on betting, and small-sample fallacies. In further research I hope to measure the impact of betting on bettors themselves, as well as their family members, themes highlighted from focus group discussions with spouses of bettors. Further work will also explore the social dimensions of betting participation, evident in observations of betting locations. Given the growth and magnitude of the sports betting industry across many African countries, further study of this topic is important for understanding the financial realities of the people in this population, how sports betting is impacting their lives, and if and how other services can be targeted at vulnerable populations to ensure that any negative effects are mitigated.

Additional findings from the research can be found here.
Most updated version of the report and appendices can be found here.