Tuesday, July 30, 2013

Landscaping Mobile Social Media and Payments in Indonesia: Final Report

This is the final report from Tom Boellstorff and his team of researchers regarding online shopping habits, social media practices, and mobile phone use among Indonesians. This IMTFI study received funding from sicap, a Swiss-based organization that provides software solutions for mobile network operators. To see an earlier post about the preliminary findings from this study, click here.

Fried Bananas Online. Ahmad Lutfi Amrullah, a fried bananas trader in Surabaya, grew his business using Facebook and Twitter. Photo credit SP/Nur Fajaruddin.

Tom Boellstorff and his team of research collaborators present here their final report--entitled "Landscaping Mobile Social Media and Payments in Indonesia"--on the "triple intersection" of (1) smartphones; (2) social network sites; and (3) purchasing and selling online in Indonesia, and how this intersection affects online shopping habits and social media practices in Indonesia today. Their research has produced eight key findings:
  1. Mobile devices have definitively displaced desktop computers for commerce (and other uses), but laptops remain important.
  2. Indonesians tend to follow specific pathways into electronic commerce that can move across platforms and be identity-specific. 
  3. Multiple device ownership is nearly universal in Indonesia (often four to six devices), and this is linked to particular practices of online consumerism and payment.
  4. BlackBerry is the dominant mobile device for Indonesians when shopping online, so much so that it is treated as a category of device unto itself, distinct from other smartphones. 
  5. Providers and websites are extremely important to online shopping and payment, and are the primary factor driving multiple device ownership. 
  6. Place-making is an important aspect of the intersection of (1) smartphones; (2) social network sites; and (3) purchasing and selling online in Indonesia, but often this involves localizing effects (for instance, using a smartphone and social network site to order snacks from a food stall at the end of the block). 
  7. Experiences in buying online often lead to forms of online selling, with a wide range of formality and linkage to social networks. 
  8. Risk is an ever-present aspect of online buying, but is often treated as a “risk of shopping” via the internet and addressed through various social and technological strategies.

To read the rest of the report, click here.

Tom Boellstorff is Professor of Anthropology at the University of California, Irvine. His research interests include contemporary Indonesian society (where he has conducted ethnographic research since 1992) and digital culture. His books, among others, include Coming of Age in Second Life: An Anthropologist Explores the Virtually Human (2008) and with Bonnie Nardi, Celia Pearce, and T.L. Taylor, Ethnography and Virtual Worlds: a Handbook of Method (2012).

Tuesday, July 23, 2013

Remittances vs. Savings on the Mobile Money Platform (Part 2)

IMTFI fellow Ishita Ghosh (along with her colleague Kartikeya Bajpai) studied the mobile banking partnership between the State Bank of India (SBI) and Eko in the bank-led regulatory environment in India. The following post reflects on her research findings. Part One of Ishita's post can be found here.

Promotional Material for Eko-SBI's Financial Products
Photo courtesy Ishita Ghosh

The State Bank of India (SBI)-Eko partnership started off with their flagship savings product. What Eko realized very early on is that while there was a demand for savings products and services amongst unbanked and underbanked populations, this seldom translated into actual uptake and usage. Eko believes that this can be rectified with adequate awareness programs, which also include specific financial literacy measures in order to drive the use of savings accounts. Eko and the SBI have as yet been unable to arrive at a consensus as to who should bear the responsibility (and the costs) of promoting this awareness amongst potential savings customers. Both institutions believe that the other is better equipped to undertake this drive.

Savings are generally understood as beneficial towards building assets and smoothing consumption volatility, but require initiative, discipline, and restraint, and are thus driven by a more implicit need, especially amongst low-income populations. What this means is that while potential savers feel the “need” to put money aside for future consumption, they may be unable to immediately meet this need within the constraints imposed by their limited, and often irregular, income streams. It becomes especially challenging to put money aside towards savings when money is running low or money management is wanting. During our fieldwork we met people who referred to expenditure shocks (such as a sick husband, which results in the loss of a main source of income, or the wedding of a daughter, which entails high expenses) as a primary cause for their low savings activity. 

Still, customers may sign up for mobile savings accounts whether or not they are able to sustain any activity on them in the future. Indeed, Eko observed that in the initial days after the launch of their savings product, many new customers were signing up for the accounts in response to marketing campaigns. For the first couple of years, SBI-Eko had waived transaction fees on the accounts, and deposit-withdrawal activity on the accounts was high. However, when the fees were reinstated, Eko observed a sudden drop in account activity across the country. Currently, there is almost negligible activity on the savings accounts, with some of the agents informing us that they hadn’t seen any savings customers in months, while their accounts remain open but dormant. Evidently, signing up for a savings account and registering actual activity on it may be two very different things. Still, financial service providers, and certainly SBI and Eko, continue to regard account opening as the sole success metric of their savings product. For one-time financial services such as remittance services, each transaction can be counted as it completes, and therefore the frequency of transactions can be the sole gauge of the service’s success. The savings service however, is made up of two separate transactions: a one-time registration process, and then subsequent activity on the accounts. Ideally, the success metrics of a savings product will take into account both uptake as well as usage, since uptake may not always translate into usage.

With respect to remittances, Eko soon realized that there was a natural uptake for the product on the mobile platform. In fact, remittance services are driven by a more explicit and immediate need; a safe, convenient and reliable remittance option will be 
utilized almost immediately by a customer who needs to remit money. Eko’s remittance product is especially popular in Delhi, which is the national capital of India and a commercial hub, and therefore attracts a large population of migrant workers from neighboring states, as well as from the rest of the country. Frequently, these migrant workers will tend to travel without their families, and will therefore remit money regularly back to their native villages or towns. Even if these migrant workers have travelled with their immediate families, they will almost always have kith or kin back in their native villages to whom they will need to send money at some point in time.

The migrants will commonly own a SBI account, given the bank’s strong rural outreach. Therefore, remittance counters at the SBI branches in New Delhi tend to be very busy, with the queues comprised primarily of migrant workers who want to send money back home. Consequently, SBI offloads its remittance traffic to Eko’s retail points. For the customers, this means a trade-off between cost and convenience. Customers can choose to battle the long queues at SBI, and pay the substantially lower service fees to remit money (SBI charges a flat rate of INR 25 per transaction, whereas Eko charges INR 100). Moreover, remittances sent over Eko’s platform are capped at INR 10,000 per day, in effect restricting the customer base to predominantly lower-income users. As an Eko agent in Delhi pointed out, their customers frequently elect to pay the higher fees in order to avoid hours of waiting at the bank branches, which results in missing work or wasting time, particularly pertinent for daily wage earners.

In conclusion, the implicit versus explicit demand for savings and remittance services respectively affects their uptake and usage on the mobile platform. Without adequate financial literacy measures, it is hard to drive the usage of savings accounts amongst low-income populations, although they may be convinced to sign up for the accounts through aggressive marketing campaigns. In contrast, low-income populations with a very real need to transfer money may be willing to pay the cost of a safe, reliable, and convenient remittance option. Indeed, as Eko quickly realized, this can be achieved with negligible investment in marketing efforts.

See their note in the ICTD conference 2013 close-out documentation. 

Monday, July 15, 2013

Barriers to mobile money adoption among rickshaw pullers in Delhi: Part two

This is the second of a two part post (see here for part one). IMTFI sponsored researcher Mani Nandhi highlights barriers to mobile money adoption among rickshaw pullers in Delhi by sharing her notes from the field.

How do rickshaw pullers like Vinod 
Kumar cope with everyday debt relations?
Vinod Kumar is about 27 years old from Bilheri Village, Chattarpur district in Madhya Pradesh. After finishing middle school he was not allowed to study, so he ran away to Delhi at the age of 16. He became a puller because of his tekedar (rickshaw contractor), who is also from his village. He had tried to open a bank account in his village by providing the necessary documentation (e.g. voter’s ID, ration card) about 3 years ago, but his application was rejected because the fellow villager who signed his application form was not deemed eligible. Vinod could not find another person who could sign for him. When he learned about mobile banking, he was happy that he could open an account because he owned a mobile phone. On 26th October, 2012 he opened his ICICI –EKO mobile banking account with Rs.600 (about US $10).

But when I contacted Vinod in December to check his progress, he had lost his phone. Despite knowing that he had to get a duplicate SIM card to access his account using his voter’s ID card, he said that he had left the card in his village and would have to ask the next fellow villager coming to Delhi to get it from his house. As he ran out of excuses, I sensed that there was more to the story than met the eye. Over the course of a number of small personal meetings (in the rickshaw or on the pavement away from his slum where the tekedar kept a watch), I pieced together the story.

High stakes card games drag borrowers like
Vinod into cyclical debt relations with
Gambling with cards was the main issue. He had accumulated a huge debt to his tekedar as well as a few fellow villagers. He plays cards to relax after the working day. He played much more during Dipawali (a major Indian festival of lights) because if you win a card game during the festival the Goddess Lakshmi is said to bestow good luck and prosperity on you.

Vinod explained to me that whilst small amounts are taken on a reciprocal basis, bigger amounts of money lent by the tekedar (the rickshaw contractor) or malik (the rickshaw owner) are repayable with interest. For instance, a loan of Rs.1000 (US $17) would have to be repaid in a week's time with an interest amount of Rs.250 (US $4) per every Rs.1000. Vinod's debts totalled Rs.115,000 (almost US $2,000). He said he normally earns about Rs.500 per day, which is his net earnings (after basic expenses and rent for rickshaw) from pulling a rickshaw. So that would mean repaying the debt in 7 to 8 months!

When I asked Vinod if he was frightened about such a huge debt, he shot back “Why would I be scared? I know I will have to earn and repay if I lose, but if I win I will be able to clear off some debts.” When I asked what he would do if he needed to send money home, his answer was “tekedar will lend for that purpose, if the need arises.” On seeing me shaking my head, he said calmly: “Madam, I have a small diary maintained about my loans,” and he was ready to show it to me.

There are eight tekedars in this kandhar (the Hindi term for "wasteland"), and three are frequent lenders. Vinod explained that the tekedars and maliks are happy to lend when the juwa (card games) are on, but rarely lend for other purposes. Many pullers like Vinod deposit their daily earnings from the rickshaw with the tekedar. However, the deposited earnings and the loans are treated separately. The earnings deposited are also treated as collateral when a puller borrows from the tekedar. He said that in one of the games he won Rs.40,000 (US $670). The stake was doubled in the next game by his tekedar, who encouraged him to gamble, and he was unable to resist the temptation. He fell for it and lost Rs.80,000 (US $1,340). He was forced to borrow big sums of Rs.10,000 (US $168) from three tekedars and small amounts from others. Vinod stole Rs.55,000 (US $922) in cash from his brothers at home during his visit for Dipawali, hoping that he would win big in the next game. Now he owes this huge amount to his brothers, too.

"Lena-dena hota hai and isab kitab ban jati hain" -
 "Normally there is give and take when we play;
we square up debt obligations
depending on who wins or loses."  
Vinod explained that many people in the kandhar are tempted into playing cards and thus fall into a debt trap. Normally debts are squared between winners and losers. If a friend wins big one week, he will lend to his friends who have lost and borrow from them the next, “like a moving wheel.”

But the relations with the tekedar seem different. I witnessed an ugly spat between Vinod and his tekedar. The tekedar would not let him take out the rickshaw that day because his rent for it was overdue by five days. His tekedar issued Vinod an ultimatum to clear off all dues (Rs.4300, about US $72) in ten days time. But from Vinod’s explanation this was just one of a number of debts that would need to be settled at the same time: “I will repay each lender alternately because if I repay one and not bother about repaying another, I will face the wrath of the lender who is not getting back the loan from me.”

Vinod has aspirations, but when gently reminded about saving in his newly opened mobile banking account, Vinod simply said: “How can I think of saving or bother about Rs.600 savings in my mobile banking account when my mind is concerned only with now and only about returning the huge amount I owe people? Such things are far away in my mind now.” His answer echoed his life situation that dangles between desires and actual choices made under harsh circumstances.

1. Link to their full report: Evolving Participatory Relationships for Uplifting the Urban Poor Rickshaw pullers: Next Step Forward.

Wednesday, July 3, 2013

Understanding diverse uses of mobile phones and definitions of welfare: Revisiting the fishers of Kerala

By Janaki Srinivasan and Jenna Burrell based upon their IMTFI-funded research project with Richa Kumar

Discussions of money, technology and financial inclusion focus largely on practices around using and saving money. In our work we take a step back and analyze how money is earned in the first place, and how technology is woven into people’s livelihood strategies. With this objective in mind, we studied the use of mobile phones among fishing communities in Kerala, India.

Fish Auctioning in Vizhinjam, a landing center in south Kerala, 9/25/2012
Field site and findings
We first encountered our field site through a study that has become canonical in ICTD: economist Robert Jensen’s study of mobile phone use in fishing markets in north Kerala. Very simply put, Jensen found that the use of mobile phones to share market price information made fish markets more efficient while also improving producer and consumer welfare. Our goal with this project was to understand the geographic and political economic conditions in which Jensen’s findings hold and to examine questions of generalizability. In addition, we wanted to expand definitions of welfare to encompass more than an increase in income or savings.

We used a different methodological approach to frame and tackle these questions, constructing an ethnographic case study comparing two sites, one in north Kerala where Jensen’s study was conducted and the other in south Kerala. We conducted three-and-a-half months of participant observation and interviews in 2012 at fish landing centers in Kozhikode district in north Kerala and Thiruvananthapuram district in south Kerala. We spoke with fishers (owners of small and large boats, workers), fish purchasers (wholesale traders, small-scale vendors, including male and female), auctioneers who conducted the ‘auctions’ by which most fish was transacted between fishers and buyers, activists and others involved the fish supply chain. Based on our research, we found that
  1. Fish trade in north Kerala is a special case. The region’s geography as well as prevalent investment and credit relationships allowed fishers the flexibility to sell at different markets. In south Kerala, we found that all-season landing centers were farther apart than in the north. Further, boats were bound by a credit relationship to a single investor rather than to several investors as in the north. For these reasons, fishers in the south had less flexibility to sell in different markets.
  2. Moreover, in both regions, only specific categories of actors within a landing center found price information critical in making trading decisions and regularly used phones to ascertain it. 
  3. A majority of those at the fish market were using mobile phones in a much wider range of activities related to their livelihoods. 
  4. While a majority of these individuals perceived mobile phones as having enhanced their livelihoods and well-being, their implicit definitions of ‘welfare’ were rarely focused on improved incomes alone, emphasizing instead how they used their phones to maintain relations within and outside the market, and protected themselves during times of risk, vulnerability, or emergency.
Describing our first and second conclusions, and the list of differences between fishing in north and south Kerala, is beyond the scope of a short blog post such as this one. Therefore, we focus here on our third and fourth conclusions. We discuss the varied uses of phones and the many definitions of welfare that were emphasized by different actors in the fishing industry. Based on our observations, we argue that the seeking of market price information via mobile phones should not be given an over-privileged role.

Mobile phone use and definitions of welfare in fish landing centers of Kerala

At the time Jensen conducted his research (1997-2002), phones cost Rs. 5000 (around $106) on average, and there was a clear division between those who possessed phones and those who did not. By the time we conducted our study (2012), phones could be purchased for as little as Rs. 700 (around $15) and many owned multiple phones. No boat went out to sea without a phone and most typically had multiple handsets onboard. Nor was this restricted to fishers: an auctioneer told us “There’s no business here without mobiles” and we heard this from almost all categories of actors operating in both north and south Kerala sites. Jensen’s focus on who possessed phones and who did not is therefore less significant today than it was during his study. The more interesting question today is how phones are being used by different categories of users. In addition, we saw that other technologies such as GPS and echo sounders have become popular since Jensen’s study, making it worth asking how phones are being used in conjunction with these technologies.

Among the broader uses of the mobile phone, co-ordination work between the different actors in the fish economy constituted an important category of uses. This was important in fish marketing activities, as well as in fish preservation. Boat owners and fishing crew described, and we saw, how they would call their auctioneers a few minutes before they arrived at the shore to ensure someone was on hand to perform the auctions. Fishers in the south also mentioned discussing the timing (rather than site) of landing to optimize pricing. The ice-seller on the shore called the ice company to order ice based on how much fish was being transacted on a given day. Wholesale merchants and export agents also mentioned using the phone to communicate details of the trucks on which they were sending fish to agents at the destination. The perishability of fish, of course, was part of what made this coordination work critical.

Phones were also mentioned in the context of coordinating or balancing work and home concerns, most often by women vendors who operated in south Kerala. With the growth of fish exports, the presence of export company agents on the beach and the entry of cheaper fish from neighboring Tamilnadu, small-scale vendors are increasingly being marginalized in this region. Many small-scale vendors in this region have started traveling to markets in Tamilnadu to buy cheaper fish. Women comprise a part of this population that travels long distances everyday to purchase fish. A woman vendor’s work day, which includes traveling by public or hired transport because she doesn't own a vehicle, attending an auction, purchasing fish and selling it at a market or at individual houses, can last longer than 12 hours. Since women are also seen as the caretakers of this family in the prevalently patriarchal structure of the region, they worry about their families and their children throughout the day that they spend away from home. Many of them mentioned that having a phone helped them inform their family of their schedules and delays, know what was going on at home, and relieved them of constant worry.

Just as frequently as coordination work, people on the ground mentioned fish-finding as a prime reason for using mobile phones. Fishers used phones at sea and on shore to gauge fishing grounds on a given day. We found, in addition, that phones were often used in conjunction with the Garmin GPS units that all fishing units carried. The GPS was used to mark and specify the exact location where fish had been found. Fishers both used these markers themselves at a later date to look for fish, and also shared them with friends and relatives, a practice also noted by Abraham and Sreekumar. The widespread use of GPS and echo sounder technologies to pinpoint the location of fish and the use of GPS coordinates to share such prime fishing locations with other fishers post-dates Jensen’s study and is another element of the changing industry. While the sharing of fish locations is limited to fishers’ close social networks, it is worth noting that Jensen dismisses the likelihood of such a practice existing at all and as being against fishers’ self interest.

Finally, mobile phones (along with other communication devices) were perceived to be important in times of emergency as others have also noted. Fishers used both phones and wireless sets (the latter were typically installed only on large, mechanized boats) to contact the shore or other fishers in case of emergencies (such as running out of fuel, a damaged engine). Fishers frequently mentioned the dangers of fishing. A fisherman in north Kerala relayed a story of being out at sea when the fuel finished and his eventual rescue following a phone call placed on a satellite phone to a coastguard office, adding “I have great respect for this device because it saved our life.”

Using examples from north and south Kerala, we outlined six primary uses of the mobile phone – (1) price information gathering in combination with (2) arbitrage work (as considered by Jensen), as well as (3) coordination work, (4) balancing work and family (5) fish-finding, and (6) emergency response. We did this to question the often singular attention placed on the first two, and the pithy statement that commonly circulates in the aid sector and the mass media that ‘farmers/fishermen use mobile phones to get a better prices for their goods.’ What we heard from fishing industry actors in the field in both north and south Kerala is that there is no single practice that prevails as the most significant or universally valued use of the phone. It is important here, we argue, not to mistake the focus and priorities of disciplines (such as the concern in economics for how information asymmetries affect market functioning) for the interests and priorities of target populations. There are opportunities in the ICTD space (perhaps underexplored) to support the underlying needs that these alternate practices reflect.

The varied uses of the phone among these actors are matched by almost as many understandings of ‘welfare’ in their lives. People did not define their well-being or welfare primarily in terms of their income, or in terms of optimizing it. Many of them, especially the owners and crew of vallam and gillnet boats, and small-scale vendors, spoke instead in terms of managing or coping. They spoke of their physical and mental well-being, sometimes prioritizing that over an increased income (such as fishers who spoke of wanting to sell quickly and move on to rest, rather than wait to get the best price). The survival of a fishing unit lost at sea or caught in a storm is, of course, critical to fishers’ own long-term welfare and that of their families. Fishers and others in the fishing supply chain spoke also in terms of maintaining relationships, with fellow fishers, their auctioneers, or regular buyers, rather than solely in terms of optimizing their incomes (as reflected in practices of sharing fish-finding locations). These practices may very well eventually lead to improved incomes, but in a longer term and less easily measurable way. They also lead us to ask if Jensen’s definition of the fisherman’s problem as "maximizing profits by choosing where to sell their fish" or concluding with income increases as "welfare benefits" doesn’t narrow our understanding of the reality of the fish market.

The broader implication of our work, which we are only able to flag in this post (but is available in more detail here), concerns the importance of situating analyses of technology use in the history and political economy of a region and a sector. Through our conversations and examination of archival material, we found that fish markets in Kerala have been shaped by the regulatory influences of both fishers’ collectives and the government, in particular the creation of fishers’ co-operative societies, the systematization of an auctioning system and the loosening of traditionally coercive credit relations between fishers and those who provided them capital to purchase and operate their fishing craft and gear. We suggest that when studies (such as Jensen’s) omit these features in order to create parsimonious models and explanations, we end up representing particular markets as more “free” than is warranted. In turn, this potentially blinds us to the power dynamics that shape the daily working of such a market, including who uses technology and towards what end.