Jan Chipchase at CGAP Clients at the Center

by IMTFI External Advisory Board member Jan Chipchase

Getting A Shave: Lagos, Nigeria by Jan Chipchase

What struck me about the recent CGAP Clients at the Center Convening Event in Washington DC on December 1, 2011 was the extent to which its focus  – to better understand customers, to turn customer insights into something that meaningfully changes the products/services being offered – is echoed by the challenges faced by our commercial clients. 

Pretty much every organisation recognises the need to understand their customers – whether it's to better serve their existing needs; deliver new products and services; or slightly less charitably to understand how responsive they are going to be to changes in price. There are many ways to gain a rich and nuanced understanding of the customer – and increasingly people are turning to rich ethnographic studies to compliment more data driven approaches. 

For consumer research to be impactful it needs to: have a clear client in the organisation – someone with a stake in its outcome; it needs to be soluble – in a format fit for consumption; and most importantly needs to inform and inspire the organisation beyond what it knows. Basic I know, but so-often missing when the person commissioning the research or the team that implements it lacks imagination and the willingness to put themselves on the line. Good research will communicate basic drivers, segmentation models, can reframe the value proposition; all the way through to the positioning of the brand. This is only part of the story – the organisation needs to be structured in such a way to take advantage of what they learn – the decision makers need to be in the room to absorb and act on the results.

The IMTFI is funding new projects – looking forward to researchers pushing the boundaries for another year.

CGAP Deputy CEO, Alexia Latortue has a full write-up of the event.

Funny Money Roundup 2

Another roundup of funny money, courtesy of IMTFI research assistant Taylor Nelms:

• I’m currently doing research in Quito, Ecuador, and after being mugged on a previous trip, I started putting a folded $20 or $10 bill in my shoe to have a bit of cash for a taxi if it happens again.

Now I know what to call it. Learn about the history of “mad money.” (h/t Eva)

Liz Losh's Guest Blog: Desires and Needs

As Director Bill Maurer wrapped up the annual conference about Money, Technology, and Financial Inclusion at UC Irvine, he thanked the Bill & Melinda Gates Foundation and discussed how the donor and aid communities were adapting to collaborations with the investment community. He also said that the profits associated with a "world of fees and commissions" should be understood in relationship to the products and practices of "cultural worlds." Like landlord and tenant relationships, mobile money relationships often do not function with "free agents in an open market," even though ideologies of freedom and openness may be featured in advertising and project reports. Maurer argued that "researching the interface" and developing "different kinds of vocabularies" were important areas for systematic research.

Maurer showed some of the illustrations gathered by Jane Guyer in her project documenting Wikipedia's illustrations of the entry on "Market." Although he showed farmers displaying cabbage and the London corn exchange from Guyer's collection, he argued that conventional representations of a market as a site that sets price through supply and demand was little more than a nostalgic imaginary construction that did little to foster understanding of how mobile money actually operates. As he said, "the world of fees and commissions is coming into contact with a social world with things that look like this but aren't." Instead, he asserted that refugee camps might be the best example of the general concepts discussed at the conference, as the image of a Somali refugee camp replaced the commercial and pastoral images shown earlier. As Maurer put it, "let's pluralize 'the market' into multiple intersecting circuits of finance."

In discussing behavior change around mobile money, Maurer also insisted that it was important not to overlook "the importance of fun and enjoyment," because it was "easy to think of the poor as just having needs and not having desires." He also reminded audience members that "the poor don't aspire to be entrepreneurs necessarily" and encouraged them to think about Melissa Cliver's work on "economies of enoughness."

Liz Losh's Guest Blog: Design is More Than Copy and Paste

In the final panel of the annual IMFTI conference on "Mobile Money: Lessons for Microfinance and Design" moderator Paul Dourish emphasized how the shift in thinking from "user-centered design" to "design-centered use" could be applied to mobile money systems. (The video above shows mobile phone operated vending machines in China.)

The first talk on the "Impact of Mobile Money Services on Microfinance Institutions by Patricia Pulido, Maricruz LaCalle, and Casey Conzett focused on an analysis of operational costs in Tanzania, where they said mobile money services were not developed despite the entry of companies like TIGO and Vodacom in the market and a growing role for microfinance institutions that emphasize small-scale finance. Researchers studied 37 institutions all over the region, which included places like Mufundi Community Bank, Njombe Community Bank, or Tandahimba Community Bank. They interviewed general managers, loan officers, and other bank personnel and identified a number of reasons that mobile money might be appealing, including "flexibility to adapt to client needs" (44%), "greater outreach to rural areas" (30%), "new sources of revenue by commissions" (30%), and a "greater number of clients" (15%). They also cited difficulties when electricity was unstable or the network slow, problems with training and marketing existed, or forced loyalties restrained consumer choice. Although they lamented limitations of time and acknowledged that "the field is not a laboratory," they pointed out that this was also highly original research given current literature reviews.

Speakers Panthea Lee and Zack Brisson of Reboot presented a design-savvy talk about "Value Systems in China: A User-Centered Approach to Designing Inclusive Second-Generation Banking." (Brisson was formerly active in the anti-genocide organization Enough.) In leading off his talk, Brisson joked that it was "almost as scary talking to a room full of anthropologists as it is to talk to a room of psychoanalysts." He described ReBoot as devoted to "getting to better research results" by understanding "lives and contexts" and the fact that "process maters." In focusing on China as a region of interest with an economy that was "literally skyrocketing," he argued that it was important not to forget the "many left behind" by "exacerbated economic inequality. Now, he insisted "innovation is possible" if it aims at "an inclusive, second-generation banking system. Brisson argued that China was a particularly likely area in which the unbanked could become banked through mobile money, because 70% of the population used mobile phones, remittances already shaped financial practices, and there were many existing agents. Like M-PESA in Kenya, there was also a clear vision for partnership between the telcom and the financial institution, as in the case of China Mobile and Shanghai Pudong Development Bank. Although these technologies may follow different uptake patterns, "desire for financial stability is universal."

Brisson and Lee described the core of their methodology as ethnography. Their study of study of mobile money focused on 4 cities and 6 towns and villages across a cross-section of the country. During a period of three weeks they conducted 113 interviews in the context of homes, places of business, or communal gathering points. The study relied on both unstructured and structured interviews and observations of direct service use in sectors such as health care and travel. As they explained, after unprofitable rural banks were closed as a result of market reforms, there was a strong need for mobile money to improve access to financial services. They noted that migrant populations were another important factor in the economies that they studied and that such Chinese often treated as another commodity, although they contributed to half of the nation's GDP and worked much needed high-risk, low security jobs. Furthermore, the marginalization of minority populations could create more obstacles to financial inclusion for certain segments of the unbanked, such as herdsman who had been forbidden from raising livestock by the authorities. (Older parents may have been compensated for the loss of their livelihoods, but children were not eligible for these government payments.)

Lee and Brisson emphasized three main themes:

1. Trust, defined by the in-group tendencies of kin, caste, or geography
2. Uncertainty, which might cause some to choose to forgo the risks associated with pursuing wealth. (As one couple said of their lives under Mao, "We knew we were poor, and would continue to be poor. That's better than not knowing where we will be tomorrow.")
3. Touchpoints

Lee and Brisson argued that it was necessary to design for agents, intermediaries, and influencers, not just end-users and to focus on trust, networks, and relationships. (Those interested in this approach may also want to check out the "infomediaries" research of The Global Impact Study and the work of François Bar.) For more about the work of Lee and Brisson in China, see ReBoot's blog posting on "Mobile Money in the Land of Mao."

"Best Practices in Mobile Microfinance" by Fatima Yousif, Elizabeth Berthe, and Olga Morawczynski provided a global overview of how the technology was being adopted in multiple countries. As Yousif explained, although MNOs focus on quickly profitable services, MFIs have to focus on the hard-to-reach and difficult-to-profit from. In their study an online survey was sent to over 100 microfinance institutions, and the group also conducted direct interviews of 16 MFIs, mostly in Kenya 16 MFIs, with the aim of addressing the relationship between "industry and us" and the "need to address real needs." By focusing on areas like low agent penetration, the group was able to examine social and commercial sustainability. Socio-cultural complications and research challenges are inevitable when mobile phones are frequently shared, there are problems with checks and controls, and there are low literacy levels. Yousif noted that in Cambodia low-end phones might not able to read Khmer script, and that there may be other complications in countries with citizens who have low literacy levels in own language to begin with relying on text applications. She also observed that there may be situations in which it is still less expensive to travel to a bank than to use mobile payment services, so newer technical solutions weren't always welcome. She said that it was surprising to see how few institutions did cost-benefit analyses, and how many providers assumed that there was no need for market research, because a particular approach was "obvious." In a market dominated by money transfers, where mobile network operaters know they can make the most profit, innovation was often hampered by pre-existing assumptions and the fears of stakeholders. For example, loan officers feared losing their jobs if new technologies were adopted. She also pointed out that the success of M-PESA was "both good thing and a bad thing," and she cautioned against "copy and paste" approaches in other regions. Certain factors may be "necessary but not sufficient," particularly in markets that are urban and peri-urban. She argued that "IT/MIS integration is one of the greatest challenges faced by MFIs today," a problem exacerbated by top-down decision-making.

She closed with a number of recommendations, which included "understand your market environment," "communicate, communicate, communicate," "invest time in developing your distribution network," and "test and monitor your product," because "new uses will come up." Her recommendation to "collaborate with regulators" proved to be the most controversial piece of advice during the question and answer session that followed.

As moderator Dourish asserted, "HCI not about interfaces but about relationships between design and use" and "producing designed effects." In answering his own question about where the sites of innovation might be, he emphasized the importance of "temporalities of innovation" and "directionalities of innovation." He also noted that "operator selection" was a "design decision in its own right."

Liz Losh's Guest Blog: Taking Mobile Money Out for a Test Drive

The next panel on "Mobile Money: Adoption, Uptake & Transformation" was filled with both facts and figures and narratives about inclusion and alienation. In "An Assessment of Adoption and Use of Mobile Money Services in East Africa: Case Studies from Uganda and Tanzania" by Batilda Moshy and Paul Mukwaya, researchers examined the customers' experiences with companies like MTN, Airtel, and UTL in Uganda and Vodacom, Airtel, and TIGO in Tanzania to assess how "social cultural" factors play a role in adoption, although the presentation opened with responses to more conventional survey questions about ease of accessibility, security, convenience, decreased travel time to service points, cheaper costs, good service, and decreased time spent queuing. Mukwaya pointed out that customers' and potential customers' decision-making and perceptions might also be shaped by the company first in the market, as in the case of MTN in Uganda.

They noted the importance of acknowledging instabilities and network failures, and -- like many researchers on the day's previous panel -- they asserted the importance of branding, customer care, and managing vendors. They claimed that successful awareness campaigns included several media outlets and road shows. They also observed that unregistered users could be incentivized to become registered users by "walled gardens" that made certain services more expensive.

In "Differences Between Fee Structure of Mobile Money Technologies and Traditional Banking Systems, Social Psychological Determinants and Service Uptake: A Case Study of Uganda," Bruno Yawe and Tinah Nassali used interviews with officials from the bank of Uganda to understand how fee structures might shape the attitudes of potential users. Although researchers complained about how challenging it could be to get data from banks and grappled with the complexity of accounting for transactions across the Uganda-Kenya border, they were able to show that large amounts of mobile money was banked in in customers' accounts and that it was used for many purposes, including the payment of school fees.



Jose L. Estuar introduced his talk on "Mobile Phone Cash In Cash Out Service in a Frontier Area: The Dynamics of New Money Technology and Embedded Systems of Money Relationships" with the official video above from CGAP, which showed a fluent montage of images of GCASH usage, but he also presented less polished videography from his ethnographic work with 43 households in a frontier village on a remote peninsula in the Philippines, where he also studied financial diaries. Estuar's videos showed the arduous journey by boat to his field site and card-playing in unlit domestic urban interiors to give his audience a stronger sense of place. In explaining his research on cash in and cash out services, he also said that "we will tell the stories as we go along" of "social and cultural relationships. Estuar characterized the larger project of his research as an exploration of "embedded money relationships" in the "money ecology of a frontier area."

Following Viviana Zelizer -- the Princeton sociologist who studies how interpersonal connections enter into the production, distribution, consumption, and transfer of economic value, Estuar described himself as interested in subjects who are "partly autonomous" and in interdependent relationships that are historically variable rather than in financial analysis that focuses exclusively on impersonal instruments or objectifiers. He also made no claims of finality: as he explained, “for now we tell stories of this work in progress.”

The Philippines is a country that Estuar said had reached 43% penetration with mobile phone use. As he joked, the nation even had Angry Birds, and he showed an image of Filipino spokesperson apl.de.ap of the Black Eyed Peas as an endorser of mobile phone technology. His research focused on an area outside of Manilla, which was hard to reach but not totally inaccessible and located in a spot that was not an island but might as well be, because there was no road, and visitors had to choose between travel by boat or attempting to navigate the dense thicket. His methodology involved a housing index in which domiciles might be named "house 1," "house 2," or "house 3." He reflected about how these houses related to each other in terms of money and how they might be at different stages. As he observed, "scholars call it dependency; we call it something else . . . a relationship." Although he granted that the question might remain if such a relationship was unfair, he argued that Mark Granovetter's embeddeddness theory encouraged scholars to explore how social relationships might include a seemingly exploitative boat owner.

The irony that Estuar emphasized was that a telecommunications device had been put into the hands of people in this remote area of the Philippines seemingly in order to make expansion beyond a tight circle of social relationships possible, so they could exercise more economic independence. However, ultimately the device facilitated existing relationships rather than established new relationships, particularly among people with a strong preference for face-to-face interaction rather than neutral exchanges with remote markets.

Liz Losh's Guest Blog: Self-Recognition and Brand-Recognition in African Moneyscapes

The first panel of the second day of the annual IMTFI research conference, "Mobile Money: Consequences for Poverty Alleviation," was as much about mobile carriers' strategies for public rhetoric and practical communication as it was about any possible causal connection between the adoption of mobile money as an individual practice requiring digital and financial literacy and alleviation of systemic poverty in Africa.

Presenter Karatu Kiemo presented a talk on "Mobile Money Services and Entrepreneurial Development in Rural Communities: The Case of the Agricultural Kikuyu and Pastoral Maasai Communities in Kenya" that compared financial practices of Kikuyu and Masai tribesman to understand possible differences between agricultural and pastoral populations in a case in which both groups are proximal to Nairobi. (Co-author Barbara Leseni was not able to attend the conference.)

Kiemo tried to understand the region's low entrepreneurial activity, which researchers initially hypothesized could be cultural. Their subjects were mostly unbanked, but researchers wondered if having new services might foster budgeting, saving, and risk management that would make adoption of MMS more appealing. Using Icek Ajzen's Theory of Planned Behavior, the Kenyan researchers hoped to understand personal attitude, perceived behavior control, and entrepreneurial intention, while also measuring personal finance management that might even include future estate planning.

Information in Kiemo's study came from 174 participants, divided approximately equally between agricultural and pastoral respondents. 83.9% were owners of their own mobile money platform, while a significant minority were also users of borrowed phones and/or SIM cards. Researchers found a significant difference in entrepreneurial intention between mobile money service users and non-users: 75% vs. 50%. Yet there was no difference that could be measured between early adopters and later adopters of the technology. The hypothesis that these services also might promote personal finance management was also supported, but the data about mode of livelihood as a factor was more ambiguous. Researchers expected pastoral populations to be more fatalistic and less likely to budget, but those in the pastoral sample actually were active managers of their finances. However, 42% of agriculturalists used mobile money, while only 7.7% of pastoralists did. In fact, 49% of the latter still save with "live assets" (their animals). 90% of the agriculturalists reported entrepreneurial intentions. Researchers found Maslow’s hierarchy of needs useful as an explanatory mechanism of the phenomena that they observed.

Ndunge Kiiti and Jane Mutinda followed with a study focusing on Eastern Kenya and the use of M-PESA. Rather than only focusing on high-level strategies of corporate brand penetration, in "Mobile Money Services and Poverty Reduction: A Study of 21 Women's Groups in the Rural Region of Eastern Kenya" examined self-help groups as well, such as the Strength of Women (VWAG) in which the researchers were also members. M-PESA has tried to capitalize on the forms of person-to-person education practiced by those groups. In the image above Kiiti holds up the M-PESA t-shirt that she draped on the podium during the panel.

Kiiti cited the saying that "a human becomes a human because of other humans" to characterize the researcher's framework, which moved step-by-step from a focus on "individual" to "family" to "community" to "nation" with an emphasis on training and workshops. Their data was gathered from 21 women’s groups where, following the dictates of Paulo Freire, everyone is a learner, and everyone learns from each other. Researchers did field work that included site visits to the groups' social settings, where they conducted multiple in-depth interviews with individuals and five focus groups. They also performed observations of user behaviors with M-PESA. Clearly, Kiiti argued, the service caters to groups without banking and builds on the existing urban-rural linkages that were described by Mas & Morawczynski.

Perceived advantages included M-PESA's security and safety, privacy and confidentiality, convenient access at many outlets, and advantage from the perspective of time management. In a world in which "delays are losses," this efficiency really mattered to the women that they studied. Researchers more broadly claimed that M-PESA promoted rural development, assisted in business, encouraged good record keeping, created employment, and fostered participatory culture around rewards programs. M-PESA also facilitated group payments, which could also affect group dynamics negatively, because of possible social losses resulting from decreased face-to-face contact. Other problems included fraud, network failures, excessive user charges, risk of debt from freer spending, limited services, and lack of disability access. Kiiti argued that technocratic approaches might miss the importance of a "powerful speaker" or a sociological understanding of group names, where terms like "love," "commitment," and "unity" frequently shaped group identity. (A working paper from Kiiti and Mutinda is posted here.)

The panel's final presentation on "Does Mobile Money Matter? Exploring Mobile Money Adoption by Ghana’s Urban Poor" from Vivian Dzokoto and Edwin Mensah repeatedly made the point that "Ghana is not Kenya." In 2008, apparently, mobile money services were introduced, but "nothing happened." Even after 2010, when four telephone companies were in the market, Dzokoto described the main feature of the Ghanaian "moneyscape" as resistance to new money products. Even debit cards were slow to be taken up in a country where only traditional ATM cards had been successful. Researchers chose "awareness," "attitudes," "uptake," "barriers," and the "impact" of mobile money as the focuse of their year-long study of mobile money post-(re)launch, which focused on 35 low-income Ghanaians and 35 non-poor lower middle class income Ghanaians, as well as a review of documents that included magazine advertisements and brochures, along with location scouting for billboards and mobile money advertisements.

Dzokoto and Mensah reported confusion about the role of banks, a lack of trust, and fear of both excessive spending and the loss of the phone. The higher income group had more complex understanding of mobile money, although less than 10 had actually used mobile money themselves. This group also lacked awareness of global context of mobile money, and were even unfamiliart with its non-remittance potential, because they had seen so much sending of mobile money person-to-person advertised on television. Interviewing vendors and merchants also showed low patronage of mobile money services typified by the following comment: "They took the ezwich machine away and have not brought it back." In other words, despite visible marketing, there was low awareness, and thus a need for person-to-person education existed. (It was noteworthy that during the Q&A, one commentator noted that providers might shift liability to their clients through financial education in ways that serve corporate self-interest rather than financial inclusion.)

Companies like AIRTEL may have two million mobile phone subscribers, but only 1% of their customers were registered for mobile money, and such corporations offered hands-0n workshops for journalists, like one held in November of 2011, rather than one-to-one education aimed at users. In the case of TIGO, which had designed a post-launch marketing campaign, the carrier had done relatively better, particularly by differentiating between table top phone credit vendors and mobile money agents to promote trust. As they closed with images of Accra Mall or buildings on Oxford Street, Mensah reminded the audience that "In Ghana, cash is still king."

Moderator Maria Stephens of the U.S. Agency for International Development (USAID), and noted mobile money skeptic reminded the audience that not every country would have the same kind of experience that Kenya had had with M-PESA. She pointed out that just as Nixon argued that democracy is not a potted plant that can be transplanted into any soil, it was important to not fall into the we-build-it-they-will-come trap. Stephens also differentiated between "promoting a low-value low-functionality money transfer service" that functioned in an income-smoothing context or "a high-value unlimited functionality model" tied to broader financial services not subjected to banking laws that could unintentionally allow a parallel shadow banking system to flourish.

Liz Losh's Guest Blog: From Statecraft to Neighborhood Soap Operas

In the final panel of the day on "Currencies in Collision," the first presenters came from Birzeit University to discuss "Management and Mechanism in Palestinian Economy in Multi-Currencies Context" in a study that represented the collaborative efforts of Nidal Rashid Sabri, Diama Abu Laban, and Deema Waleed Haniya, although only Laban and Haniya could attend the conference in person.

They described the different sectors of the economy as follows: 1) the official banking system composed of 18 banks, which were mostly foreign, but included both commercial and Islamic institutions, 2) moneychangers specializing in the buying and selling of currencies, 3) about nine microfinance organizations (besides UNRWA), 4) about forty FOREX trading firms, 5) the insurance sector, which is comprised of 10 corporations, and 6) the financial market, which consists of one stock exchange. Presenters reminded the audience that Palestine was a country under occupation, in which territories were not connected and the land was dotted with very poor areas, such as refugee camps.

The central fiscal challenge, as they described it, was the fact that there was no national currency, since prohibitions on statehood make printing and circulating their own money forbidden. As a result citizens were forced to use three separate currencies in use for different purposes: the U.S. dollar, the Jordanian dinar, and the Israeli shekel. Palestinian ATMs deal with all three currencies, and people generally understand the currency conventions in use. For example, when dealing with lands, the dinar is the only accepted currency, but when buying an apartment the dollar is used, and daily transactions were conducted mostly in shekels.

Furthermore, the Palestinian team described limited availability and awareness about using innovative financial instruments. In their entire country, there are only two banks with Internet banking, and no mobile money in use at all. Finally, the fiscal landscape is shaped by high incoming remittances from Palestinians sending money home from work abroad. Thus, presenters argued that factors that shaped behavior around saving in these currencies suggested the need for fundamental revisions.

As they explained, the research group's methodology focused on examining the related laws, rules, and regulations, analyzing the related data, and conducting interviews with both bank treasurers and clients about the three currencies. What they discovered that currency choice was most determined by personal income currency (44%), trust was the second most important factor (27%), and comparison of interest rates was a relatively minor factor (17%). Bank officers provided explanations of user reluctance to use e-banking as follows: they "don’t know how to use it," "don’t know about about existing technologies," and "prefer personal interactions." They also assumed that security issues or fears of hacking were more important than their clients did. Their findings indicated a need for awareness campaigns, a need to adopt new regulations, and a need to connect treasury transactions.

The theme of alternative currencies was continued in the next paper from Magdalena Ramada-Sarasola, Henk van Arkel, and Eduardo Tarrag about C3U in Uruguay: "Determinants of the Demand for Micro-saving Programs in Uruguay: Motivation and Resistance to Join C3U." In introducing herself to an audience suspicious of economists, speaker Ramada-Sarasola did confess, "I am an economist. I must admit that," but she also showed a matrix of two-way transactions involving individuals, firms, government, and banks and financial institutions. She explained how the innovative money system C3 or Commercial Credit Circuit was developed by the Social Trade Organization (STRO) and supported by several bilateral and multilateral donor organizations piloted since 2005 in Honduras, El Salvador, Costa Rica, and Brazil had already facilitated 12,000 small loans that were approved in a circuit aimed at increasing liquidity by focusing on business-to-business transactions and setting up regional business networks.

Ramada-Sarasola's case study focused on mobile money in Uruguay with an emphasis on issues involving "trust," "scale," and "the chicken and egg track" in a region where 45% of the population was unbanked. She argued that one of the major factors favoring successful adoption of C3 in Uruguay was participation by the Uruguayan government sector to address the issue of scale, since all state-owned enterprises accept C3 and bills for water, electricity, public transport, and communication can be handled with C3, and even taxes can be paid with C3. Governments also had reasons for encouraging C3 beyond the "political agenda" of financial inclusion and promoting themselves as altruistically motivated, because being able to track transactions opened up opportunities to tax those transactions, although the government has promised that this new tax revenue will go to the local community that is generating them.

This C3U research focused on a sample of 28 neighborhoods around Montevideo, where penetration of mobile phones was an astonishingly high 116% and the illiteracy rate was relatively low. Furthermore there was great trust in retailers and a public bank serving as a warrant. They found no a priori resistance to adoption among the 45-77 year olds interviewed about their demographic profiles, understanding of context, use of mobile phones for services like text messaging, financial behavior, and acceptance of mobile money. The only notable area of resistance involved buying and selling merchandise, which researchers attributed to the lack of young people on the pilot and the high default rate associated with stores.

(The "two currencies" of Uruguay are further explained to English speakers by a blogger in a posting here.)

The final research from Chile from Jose Ossandon Valdes, Tomas Ariztia, Macarena Barros, and Filipe Gonzalez on the "conflicting currencies" panel covered "The Financial Ecologies and Circuits of Commerce of Retail Credit Cards in Santiago de Chile." Valdes described how researchers drilled down into a rich data set of recollections that captured intersecting financial narratives based on interviews, files, notebooks, and bills, which allowed the team to map circuits and reveal an entire history of retail cards, although stores were not always happy to give all information that they kept on the families of customers. The small domestic dramas included characters like 31-year-old Francisca whose husband was in jail and 66-year-old Maira with two sons working in the fruit market. We learned about how these characters spent their limited resources on discrete purchases like buying a pair of pajamas, a hoodie, a bottle of perfume and how cards circulated among people to facilitate such purchases. Figuring out accounting when so many people lent out their cards and then figured out who used it later created thousands of possible soap opera episodes in the circuit of commerce that Valdes detailed. Of course, not all the portraits were complete. As he noted Juana might have a suitcase where she saved all the receipts from credit card bills, but Maria might make her own clothes and try only to buy in cash.

This these smaller circuits of commerce, the risking of friendship ties was often a nothing type of potential liability from financial participants. For example, Paula might be irritated by neighbors paying late without paying interest after borrowing her card. The Chilean researchers summarized their preliminary findings with a few major themes, which included "rationality" in which participants must negotiate complex uses and multiple alternatives, "ecologies" as ways to understand the financial lives of those excluded from banks but not stores or might be excluded but not members of the poorest groups, "circuits" in which credits are mixed with kinship relationships and systems of care, and "social-technical networks." (Only one participant saw the cards as only "private.") However, there are rules and conflicts, which community members often understood through the similarity of forms of association, so that this system is not new for them.

Moderator Scott Mainwaring from Intel noted that each presenter on the panel ultimately used a different methodology to visualize the financial flows that they described, but they all asked "where do different currencies flow?" and "where are there barriers to this flow?" as they explored their common interest in circuits, although they might have different lenses for what a circuit is. This panel about alternatives dealt with many affordances and constraints, particularly when the preferred alternative is banned, as in the Palestinian case.

Liz Losh's Guest Blog: Who Do You Trust? Me or Your Lying Eyes?

The panel on "Mobile Money: Trust and Behavior Change" focused on how traditional credibility and economic credit might be still very related. Ironically, rather than emphasize trust, the video above from the Rural Bankers Association, which the first presenter Anatoly “Jing” Gusto of MICRA Philippines showed in his presentation, emphasizes convenience. The heroine "Nanita" who must keep house and operate two businesses no longer has to neglect her enterprises while she travels to and from the bank via jitney. However, Gusto and co-author Felicidad "Fely" Justiniana argue such rhetorical appeals from groups like the RBA and USAID's MABS that show the ease of text-a-payment practices may do little to influence potential clients to change their habits much when it comes to savings.

Perhaps the most memorable image in Gusto's presentation was a slide of the classic eighties video game Pac-Man. In Gusto's use of the game as an analogy for microfinance and mobile money, an RB borrower paying loans using mobil money must significantly navigate a maze filled with the ghosts that are barriers to financial inclusion. In this "struggle to make sense" of one's immediate economic circumstances, Gusto argued that the disenfranchised must look for their "power pellets," which were mobile technology services designed to help ambitious earners achieve better and more effective access to financial services.

Gusto tried to answer his central research question "Does mobile technology foster savings?" by examining his case study, Green Bank. His informants said that their funding from Green Bank represented the first formal bank loan for most of them. Nonetheless many of them still preferred hiding cash in their homes rather than saving in the abstracted terms of a financial institution. Furthermore, many claimed that they didn’t have the capacity to save and would prefer to use excess cash for their own businesses on the theory that that this financial strategy would ultimately bring in more income.

Mobile money was rarely used by such people, who still had a strong distrust of using the phone for m-banking. Thus, Gusto argued, mobile money had a weak effect on diversifying use of mobile money. As he put it, "technology is not enough," particularly if projects failed to address the human and organizational aspects of financial transactions or rectify problems with interoperability. The solution was assumed to be consumer education that acknowledges the importance of certain influences, such as family members, while also showing a path toward engaging in life and work spontaneously. In such campaigns, "the savings experience not the device should be the central focus."

Next, graduate student Mildred Makore from the University of KwaZulu Natal presented what she called an "additive model not transformative model" to characterize her work on "Exploring Use of Mobile Banking Services by the Poor: Case of Wizzit Bank in South Africa." Her case study of Wizzit Bank attempted to grapple with questions like "What is the actual usage of the mobile banking platform by the urban poor?" or "What purposes drive them?" After diving into a literature review of ICT poverty alleviation and development policies, Makore explained the work of "Wizz kids," who were unemployed university graduates hired to market the bank's services and sign up new clients in a "motivational exercise" centered on continuously going into same area and thus commiting the Wizz kids' labor in ways that could potentially go beyond sales.

In mapping the networks of the 500,000+ clients of the bank -- a group that included farm workers, security guards, miners, domestic workers, and factory workers -- Makore adopted a "capabilities approach" that focused the particular value that an individual might consider. (Of course, to gain one of the prized Wizzit cards one must meet the minimum requirement of identification.) She also explained how she narrowed down her research plan to areas with concentrations of Wizzit users in informal settlements in Alexandra, Orange Farm, and Kahlekong.

Finally Mani Arul Nandhi presented her study of how EKO functioned in India, a country in which 41% of the population was unbanked and 51% was financially underserved. Although urban poverty was over 25%. India had almost universal telecom access with one of the lowest cost retail distribution networks in the world. Nandhi's study of 160 customers and 13 agents may not have included the top executives to whom she hoped to have access, but "Impact of EKO's SimpliBank on the Saving Behaviour and Practices of Low Income Users: The Indian Experience" did present interviews with 20 EKO customers, 8 of whom had no bank account previously, to understand why it might be easy for such clients to save small amounts, particularly if they could avoid spending on nonessential (65%) or feel trust that EKO was a safe place to save (56%). Such services were considered particularly useful for reciprocal borrowing and savings and helped users "resist temptation" or "increase their resolve."

In the United States, social media campaigns affiliated with Occupy Wall Street have urged Americans to dump banks in favor of supposedly less rapacious credit union that were more averse to excess fees. Similarly, in Nandhi's Indian case study, financial transaction fees were also a strong source of deep customer dissatisfaction, particularly after September 2010 when those who depended on EKO services for basic financial services had to pay for both deposits and withdrawals. Furthermore, she argued, the market strategy of EKO seemed to be migrating from addressing the needs of the local unbanked to handling remittances from laborers abroad, which offered more lucrative commissions to financial agents.

As Julia Elyachar observed, all the papers adopted what she called a "user-centered approach" oriented toward the "beginning of a world that we now take for granted" and the "addition of new kinds of infrastructure" that was "person-centered" to enable an "increased repertoire" in which the user makes decisions in ways that acknowledge the importance of merchants and different actors. Such approaches center on "use not technology," as in the case of the conflicts over fees that Nandhi described.

Liz Losh's Guest Blog: Failed States, Shitting Grounds, and Ethnic Slurs

In the first panel on"Money Cultures: Identity, Wealth & Poverty" at the IMFTI annual conference researchers told stories about urban informal economies that might be at variance with the official narratives of international development, conventional charity, and even newer microfinance schemes.

The first presentation “Beyond the Failed State: Capital Mobilization, Investment and Entrepreneurship among Somali Refugees in Nairobi, Kenya" by Kenneth Omeje, who has presented at IMTFI before, and John Mwangi countered conventional tales of woe from the region about child soldiers and humanitarian catastrophes in which refugees from failed states never appear as economic actors and only take the stage as "poverty-stricken parasites" like those shown in this Google search for "Somali refugees" above. Instead Omeje argued that one could look beyond the one million "highly deprived" people in refugee camps suffering from the impacts of climate change as well as political instability to include the financial activities of 150,000-200,000 people in the densely populated suburb of Eastleigh, which is also known as “little Somalia” or "little Mogadishu" in the region, where shopping malls like the one pictured along side the Google search result screen present a very different picture of the Somali immigrant experience in Kenya. Omeje admitted that it was often difficult to study the underground economy, because it may involve piracy, trafficking in small arms or drugs, or other obviously illegal activity, but he also thought that the area was characterized by much more than its criminal element. (See this NPR story for more about these neighborhoods in which refugees and Kenyans of Somali origins co-exist.)

Omeje asserted that the role of community values, kinship ties, and Islamic dictates to use money to help others was often overlooked and that studying economic competition from businesses rooted in Indian diasporic communities and the ethnic Kikiyu population might also provide a worthwhile perspective on these transnational citizens and their economic behavior. The study of Omeje and Mwangi was based on interviews with 136 people, about half of whom were refugees. Others consulted included Kenyan police officers and members of rival Indian business communities. Because interviews often were conducted during business hours or broached sensitive topics, the data from the community was necessarily incomplete, but the researchers argued that there was definitely enough information to counter the prevailing stereotype of the economics of the failed state. As he concluded his presentation, Omeje showed photographs of a local branch of Chase Bank on the main street of Easteligh, fresh fruit hawking, a shot of First Community Bank, and a business plaza. The spectacle of dilapidated roads juxtaposed with modern shopping malls owned by refugee populations showed how the failures of infrastructure often coexisted with the successes of entrepreneurship.

(See this video of the Madina mall for more.)



Although efforts to "give the poor a stake in India's booming economy" have focused on giving Indian peasants title to the lands that they work, Syed Aiman Raza's study of landless tenant tobacco farmers attempting to capitalize on higher world prices emphasized the immediate context of decision-making in which the future may be less bright. In his study of 56 households, "Harvesting Death: Do Tobacco Growers Need Financial Inclusion? An Analysis into the Monetary Problems and Prospects Enshrouding Farmers Harvesting Tobacco in Basti District, Uttar Pradesh, India," Raza's claimed that his case study of Sikandarpur village shows that fertilizer input of DAP (diammonium phosphate), urea, or manure might not seem a worthwhile investment to farmers worried that landlords might evict them at any time. Although the area's Muslim farmers might have appreciated the 11% per annum loans offered by Purvanchal Gramin Bank, the cap on loans at 25,000 rupees might spur most farmers to also make agreements with money lenders, despite interest ranging from 5% to 10% per month if profits dependent upon the quality, color, and weight of their tobacco crop would benefit from the financial risk. Raza's data showed how pests and price volatility could wipe out even the most economically savvy farmer and how romanticizing financial inclusion might ignore the challenges of competition in global financial markets.

Sepideh Bajracharya's work on Nepali informal economies presented some of the most dramatic research of the day, as she attempted to explain the function of Dhukuti activities, which translates as "Treasury" or "Cash-Box," but may describe much less traditional economic activities of newly affluent Nepalis that model lottery schemes, rotation schemes, or bidding schemes that are characterized as "lucky-draw," "number system," or "releasing and eating" respectively. Her study, "Untouchable Wealth: The Moral Exchange of New Wealth among Women in an Urban Nepali Untouchable-Caste Community," chooses to present a somewhat different narrative about the sweeper caste Emukhel in the Kathmandu Valley who lived before the 1980s in houses of straw and mud once situated on a public defecating ground. These one-time untouchables no longer live in a "shitting ground." Instead their houses are of brick and cement with paned glass, closets, sofa sets, and gas stoves in communities with paved roads and attractive parks.

Bajracharya noted that although changes that generated this new wealth may be based on participation in the state and may be development-based, since city municipalities began hiring people as state-sanctioned sweepers, it is Dhukuti, or informal credit associations, often independently run by women in their forties and fifties, which inhabitants credit for allowing them to build and furnished their houses. She pointed out that there were significant differences between an "Economy of Need," which is an aid and development-based economy, and an "Economy of Pleasure" that is determined by access to and desire for consumer goods and services. She observed that the "pleasure element" of thrill, risk, uncertainty, risk, and flight marked the "late neoliberal moral economy" that she was describing in which social capital and income disparity may have served as critical ingredients.

Bajracharya detailed the activities of four dhukutis that she studied, which were based on rotation and number systems. Her informants were participants in both formal and informal economies who made little distinction between different kinds of credit and saving cooperatives. She argued that such people were most comfortable when their money is circulating, since there was a "certainty associated with a lack of trust. By not trusting any one in particular and focusing on "where you put your biscuit money," dhukuti participants might see enormous sums change hands. Bajracharya described wealth transfers occurring in "ten minutes" in a restaurant with "kebabs and dumplings." In this high-stakes environment, if you needed more money for the month, you would have to bid more. She observed that participants often adopted the same vocabulary as gambling, and that dhukuti might even be associated with dramatic murder cases, police raids, and numbers on the back side of an accounting book. Her future research would pursue the practices "historical dimension" and incorporate a "comparative perspective." (See this study for more about the practice.

The final panelist, Svetlana Tyukhteneva, regaled the audience with her tale of economic and ethnic difference in "Tell Me How You Earn and Spend Money - And I Will Tell You Who You Are," which followed the IMTFI tradition of presenting at least one paper about how livestock function as currency in households, as Tyukhteneva explained the value of camels and yaks, particularly at weddings and funerals, accompanied by a slideshow that began with an image of a man carrying a sheep.

The research idea is that the daily cash practices can serve as a symbol, marking the boundary between rich and poor, but also ethnic and cultural markers between living in the neighborhood of the two peoples. Their ways of making money, their methods of conservation, storage and use, the Altaians and the Kazakhs are different.

She explained the ethnographic value of certain stereotypes in the region, such as "Kazakhs bargain"; "they bargain at length." Furthermore, "if one neighbor buys a Mercedes, the other neighbor will do everything to get the same car." In contrast, "the Altai live poorer than the Kazakhs, but they sleep better." Such generalizations could be documented in more complex ways that foster economic understanding, and she provided copies of detailed accounting records of animals given in support of funeral feast as an example. Some of this cultural difference might be explained by religious preferences, beliefs and practices, since the Altai people were Shamanists and Buddhists for whom monetary passivity might be linked to their idea of fate. But her presentation that began with livestock reminded audience members of the built environment in which her subjects lived by showing graffiti on the wall of a marked that could be translated as "The Money is finished, Love - never."

Respondent UCSD colleague David Pedersen noted how these papers "set in the present tense" and were devoted to "identifying certain kinds of conjunctures" in which "when something happened, something else tended to happen," which could be visualized in "images and maps." He also observed how the papers did not work with the neat divisions of "public sector" and "private sector" that might be more familiar to Western audiences oriented around formal economies.

Liz Losh's Guest Blog: Beyond the 99%

In welcoming participants to the annual research conference for the Institute for Money, Technology & Financial Inclusion, where chocolate coins dotted the reception table, director Bill Maurer noted that the very value of membership in the formal banking system was already being hotly debated by conference participants at dinner the night before conference sessions even began. With the fate of the Euro in jeopardy, people being kicked out of the formal financial system in the developed world, bank protests, consumer rebellions against unfair fees and profit taking, and bank failures too frequent to be worth reporting in the nightly news, Maurer argued that banking the unbanked from the so-called "bottom of the pyramid" of financial life might be a missionary activity increasingly worth examining. Of course, as Maurer also observed, the Institute had always been interested in the many ways that the "end of banking" might be imagined from the apocalyptic to the mundane as a response to perceived crises in the formal economy.

Maurer reminded attendees that this was a conference known for providing a corrective to the just-so stories told by economists about twenty-first-century money as a set of transparent frictionless transactions that could be easily aggregated and numerically abstracted. As Maurer explained, it was a conference intended to draw on the knowledge base of a variety of other disciplines -- including agriculture, anthropology, design, and IT -- to explore material culture and social practices that might otherwise be treated as ephemeral or insignificant. Of course, this conference had welcomed papers in the past on everything that relates to IMTFI from an uncovering of underwear money to accounting with the bodies of dead migrant workers. To acknowledge the fact that the conference often celebrated money as well as studied it, Maurer introduced Catherine Eagleton of the Money Gallery of the British Museum.

Maurer told the story of the founding of the institute, which he traced to his initial experiences at a mobile money workshop at the Federal Reserve, where he apparently thought “now here’s a kind of financial innovation that we can all be excited about.” Although these "bridges to cash" might have been built most rapidly in the case of M-PESA and its 14 million accounts, Maurer asserted that this kind of "entire new business" was most notable because it reopened discussions of "the definition of money itself," which "changed the terms of discussion at moment when we need new terms."

Rather than have U.S. specialists "parachute in" to a given country, IMTFI emphasized funding the research of local and regional experts and suspicion of the tendency to "overuse economists." Maurer explained how there were now 100 researchers working in 50 countries who represented "other kinds of disciplinary training" and an "alternative sets of voices" at a conference that was tolerant of exploratory work that had not yet produced "completed research results" in the interest of facilitating conversation and disseminating new ideas. As Maurer pointed out, there was even "an ethnographer studying us" as a "community of scholars," whose work had already appeared in Critique of Anthropology. (Author Anke Schwittay presented a talk about Kiva last year.)

Women's Groups and Mobile Money in Eastern Kenya

IMTFI is happy to release our most recent working paper, a study of rural women's groups in Eastern Kenya and use of mobile money technology. Here is a brief summary and reflection from IMTFI researcher Ndunge Kiiti:

Our research in Kenya was a real eye opener in terms of what mobile money services rural women need, for their projects and groups to succeed.  The primary goal of our study was to investigate the use and impact of mobile money services (e.g. M-PESA, YU and Zap), among the 21 women’s groups, as a tool for poverty reduction in Eastern Kenya.  We met with the women from all the 21 groups, using the format of in-depth interviews, focus group discussion, or participatory observations.  The highlight of the process was a workshop we held at the end of our data collection process. What an experience!!! We had about 100 women (about 4-5 representatives from each group) participate.  Since ALL the groups use the M-PESA service, we were able to get in touch with the staff and they happily attended the workshop as well.  It was an extremely informative process, not just for the women’s groups but for the M-PESA staff.  They got to hear nine of the groups talk about various projects they are doing in the community.  They also got to hear some of the opportunities and challenges the women face in using M-PESA services.  The M-PESA staff were  extremely moved by the conversation.  Even if they had known this information prior to their workshop, it was good for them to hear, first hand experiences, from the field.  At times the staff seemed overwhelmed with all the women were doing with such limited resources and opportunities.  The M-PESA staff were able to share, the women’s groups, and also address some of the opportunities and challenges related to M-PESA services in rural areas.  They also provided products and upgrades that the women had access to at the workshop.  A highlight for the women was the M-PESA staff bring T-shirts for everyone!   That was a treat.  Overall, the dialogue was extremely productive and there was commitment to continue in conversation to see if there’s other ways M-PESA or Safaricom might partner with these women’s groups. 

Click here to read the paper! 

Alternative Banking and Social Inclusion

by IMTFI researchers Kurt von Mettenheim and Olivier Butzbach

This post reports on an international seminar sponsored by the Rockefeller Foundation in July, 2011 that brought together several of IMTFI's researchers with colleagues from around the world to discuss alternative banking and "social" inclusion. Often we read and research financial inclusion without reflecting enough on social justice and social welfare policies that may or may not accompany financial inclusion goals. This conference took up this issue.

These ideas were first explored in 2006 at an international seminar in São Paulo and developed further at the 2009 Meeting of the Society for the Advancement of Social Economics in a session entitled “An Alternative Banking Business Model? Savings, Cooperative and Public Banks in the Current Financial Meltdown.”  We have since worked with business and public policy schools and alternative bank groups and associations to build a network capable of launching new Core Principles for Alternative Banking and Social Inclusion. The July seminar confirmed the potential for new technologies at large alternative banking institutions in developing and emerging countries to accelerate social inclusion (and maintain it in advanced economies).