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