Tuesday, December 6, 2011

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.

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