Trains at Different Stations: The Ghanaian-Kenyan Mobile Money Discourse

By IMTFI researchers Edwin Mensah and Vivian Dzokoto

In this post, we offer some reflections from our experience in two recent conferences on mobile money uptake. The first was the “Reaching the Unreached: Mobile Money Uptake in Ghana” conference in Ghana in March 2013. The second was the GSMA MMU Global Event which took place in Nairobi, Kenya in July 2013.

Being on the organizing side of the first conference and attending the second one gave us some comparative insights into the dichotomous worlds of Ghana and Kenya’s mobile money (MM) sphere. While it was encouraging to hear the promising reports by various mobile money operators in Ghana during the March 12-13 2013 IMTFI conference, their recounted milestones paled in comparison to the success stories presented at the 2013 GSMA/MMU conference by their East and South African counterparts.

Participants being taken through Airtel Money. Photo by authors.

Juxtaposing the conferences highlighted some important trends. Deliberations were geared toward finding ways to make the delivery of mobile money services faster, easier, safer, and more convenient—possibly without a glitch. Moreover, both conferences sought to create a conversation among different stakeholders in the mobile money space—from the mobile money industry, e-commerce experts in the private sector to government representatives. One key difference was that in the Ghana conference we reached out to actual and potential end-users. Based on these two experiences, we offer some reflections and open up some questions addressing mobile money in general by thinking through the different models of uptake between Ghana and Kenya.

What’s up with M-Pesa vs what’s next

Sited at the Sarova hotel in downtown Nairobi, the GSMA conference proceeded with a focus on balancing quality in mobile money distribution channels, highlighting the issues of interoperability, designing key performance indices (KPIs), managing risk and fraud, market research and customer segmentation, as well as the role of women in providing mobile financial services. The conference placed a more global emphasis on the issues facing the mobile money industry. The Ghana conference addressed the factors underpinning the non-adoption of mobile money in Ghana and sought to promote active usage of mobile money. Some of the emerging themes from the conference included: trust, mobile money security (due to internet fraud—alias “Sakawa”), scalability of the product, and the interoperability of platforms to ease and enhance transactions. Overall, the deliberations at the two conferences revealed some common elements of the problems dogging the mobile money industry. Among these were the issues of: Connectivity, Security, Scalability, Interoperability, Accessibility, and Agent training and representation.

In spite of the commonalities stated here, and the strides made in improving the awareness of mobile money adoption in Ghana, a lot still remains to be done in combating the lack of knowledge and the resultant anemic adoption rates in the country. As the GSMA dialogue on the most pressing issues facing the industry progressed, one could not help but notice the contrast in the tales of the two sub-Saharan countries, namely Ghana and Kenya. Clearly, the rate of adoption of mobile money and the evolution of the technology into other aspects of the economy are cruising at different altitudes in the two countries.

In short, while Kenyans are looking forward to the next steps for M-PESA, Ghanaians are still wallowing in the pit of unawareness and an acute lack of knowledge of the product. These differences beg the question why mobile money adoption has been so successful in Kenya versus Ghana.

Registering for M-Pesa. Photo by authors.

A conversation between two businessmen/women, one from Kenya and one from Ghana raised another set of questions that have so far not been explored in the mobile money space. These questions have to do with socio-economic inequalities and different business cultures in the financial and communication sectors in the given countries. While we realize that this is anecdotal evidence at this given point, it opens up questions for various socio-economic and cultural factors to come into play for mobile money adoption. The following is an excerpt from the conversation:

Researcher: [Coming from Ghana]…we’re quite surprised with the rate of adoption[in Kenya].

Ghanaian Business Woman: Okay, let me tell you why … Prior to the advent of mobile money, a large proportion of Kenyans felt financially and socially excluded in the country. In fact, most Kenyans, by virtue of their socioeconomic and financial status, are not allowed to conduct business with certain financial institutions meant for the upper class.

Kenyan Business Partner: That is true … the class system in Kenya is terrible. The social divide is so wide that the poor resent the rich and crime is increasing.

Ghanaian Business Woman: The extent of the social exclusion is so severe and pervasive that those of the lower class are assessed penalties, extra charges, and fees if they seek to conduct business in an “upper class” bank or a bank in an upper class neighborhood. This made mobile money very attractive to the poor and financially excluded and thus sped up its adoption upon introduction. It also explains in part why the central bank made financial inclusion a primary objective and aggressively took steps to address it—because it was causing more resentment and crime … But this doesn’t happen in Ghana you see … it doesn’t matter your status, you can always do business with any financial institution without incurring any extra charges. You are not treated differently.

Indeed, she seems to be on to something very interesting which our research, like many studies, had not uncovered. In this snippet of conversation, these actors on the ground brought to our attention particular factors that may affect mobile money uptake but are not commonly discussed in conference settings or panels. Some of these factors include socio-cultural factors that are hard to uncover with routine academic research and can play very significant roles in explaining consumer behavior in developing countries.

The key takeaway from this encounter serves as a contrast to my experience in the two conferences in that in going forward, mobile money research should look into questions about socio-economic factors, cultures, and institutions that play a role in uptake.

Betting on Chance, a Booklet

by IMTFI researchers Ana Echeverry and Coppelia Herrán

Betting on Chance is the result of a research project that seeks new ideas and answers to achieve financial inclusion by working with and adapting services originally intended for gambling. During research in Medellin, Colombia, we found that people living below the poverty line were using game network operators as a means of conducting their daily financial activities. Network game operators are companies that specialize in managing betting and gambling games through a network of privately owned points of sales as well as affiliate independent sellers. Each seller uses a digital device or point-of-sale terminal for issuing tickets and completing transactions online.

The booklet includes helpful illustrations of the movement of money.

By using video-ethnographic methods, our team of social scientists and designers documented the activities of 21 informants who work in street-sales in the city of Medellin, Colombia. Why, we ask, are these game operators preferable as financial service providers for the poor? What needs do they address? What can mobile money service providers and microfinance institutions learn from these local institutions and practices? Although this study only covered a limited geographic area in Colombia, we believe that the findings and guidelines can be applied in different contexts affected by poverty in this country and beyond. Through an exercise in design thinking, we draw attention to criteria that should be taken into account when developing new products and services aimed to facilitate the use and exchange of money among people with scarce resources.

This booklet seeks to elicit conversations and the exchange of ideas across various fields including development economics and microfinance, social studies of poverty and human centered design. We hope the guidelines outlined in the booklet will help people working in the public, private and academic sectors to design alternative policies and programs to serve the common good.

Our final brochure is available both in English and Spanish.

If you would like to learn more about this project or have any comments, please contact:
Ana Echeverry: Email: anamariaev@gmail.com
Coppelia Herrán: Email: coppe@me.com
www.toca.com

Grandmothers as Mobile Money Brokers in Kenya

By Sibel Kusimba based on her IMTFI-funded research

In Kenya the use of mobile money sending systems has become a part of daily life. In 2012 my research team and I used semi-structured interviews to collect information on the connections forged by sending and receiving mobile money. From this information we created social network maps which reveal the paths of mobile money that circulate in families and show the connections of love, reciprocity, and obligation among members.   

The social network maps show that women have various positions of advantage – what sociologist Pierre Bourdieu called social capital. Women often have many connections, sending and receiving money from siblings, children and grandchildren this helps make matrilineal kinship ties important in social network graphs. Finally, women are often brokers – connecting groups or “cliques” of others who would not otherwise be connected.  

Figure 1 shows mobile money flows among a family living in the rural hamlet of Naitiri, Nairobi, and Chicago. The two main groups in Figure 1 are the children of a pair of sisters. A 67-year old farmer I will call Ruth (red circle) receives remittances from many of her eight children and 44 grandchildren, in turn circulating them back to her children but also brokering these resources with her deceased sister’s oldest daughter (green circle), who in turn sends and receives remittances with her siblings (also in green) and their children (in yellow). Ruth’s network also receives international remittances from the United States from one son and one daughter (light blue).  

Figure 1

Writing in the July 2013 issue of American Anthropologist, Matthew Peeples and W. Randall Haas review theories of brokerage. The “individualist” model associated with Burt’s classic study assumes brokerage is a position of advantage that implies control over flows from one group to another. |The alternative “collectivist” theory argues that brokerage can be an ambivalent, risky or disadvantageous position and this can be more appropriate in settings where group or collective interests are valued more highly than those of individuals. Where the interests of the group in general are more valued, individuals will in fact use their broker position to close the “structural hole” and create more ties. These cultural settings may value collective interests- the trust or frequent contact allowed by the dense network- above those of individuals.   

There may be aspects of both individualist and collectivist approaches to brokerage in Kenyan women’s use of mobile money services. In another example, Sister Lucida is a 47-year old nun and student in Chicago who sends about $300.00 a month to her mother in Homa Bay County, Western Kenya. Sister Lucida is too busy to hear and assess numerous requests for school fees and business investments from her relatives and allows her mother, a widow, to use the money she sends as she sees fit to help the family. After her father died, Sister Lucida explained that her mother became vulnerable among her in-laws, who chased her away from her home and stole her dishes and home furnishings. Sister Lucida and her siblings built and furnished her a new home on land they purchased that is the envy of the village. Sister Lucida sends her money for “upkeep,” and is aware that the money ends up helping others in the family as her mother sees fit. Both she and her mother enjoy her status as a mother of a child in America. 

As a broker, the Naitiri grandmother Ruth has used her influence in the family to fill the structural hole and further the connections between her children and her sister’s children. The children of Ruth and her deceased sister have created a family association to collect school fees for the children and grandchildren of this pair of sisters. At the deceased sister’s funeral (often a time when social groups and generations reconstitute themselves, and when discord is displayed and assuaged), the children of these two women, who live in Naitiri, Kimilili, Chicago, and Nairobi, discussed the high cost of education. They then formed a credit and savings group in which each of them agreed to contribute 1000 shillings a month to a common savings account from which school fees would be paid on a rotating basis. The members meet once a month for a meal, where they also contribute 1000 Ksh. each towards a banked fund for school fees. Mobile money services are used by some at the meeting to send mobile money to the treasurer - from Chicago, a daughter uses Western Union.

In many families, siblings and other close relatives use mobile money to contribute regularly to informal savings or insurance plans in anticipation of funerals, weddings, medical care and educational fees. Matrilineal flows of mobile money often give mothers and grandmothers the potential to be brokers; but often women use these positions to recirculate funds, and create new, close connections of benefit to the group as a whole.

Dense networks may also reflect the limited social prestige and authority of mothers and grandmothers who, on maps of mobile money, are so central in collecting remittances. Several months after my field research in the summer of 2012, Ruth was hospitalized with typhoid. Her son in Chicago told me that her children in Kenya had been unable to raise the 40,000 Kenya shillings (about $600.00) necessary for her release. Ruth continued to accumulate a bill for two weeks after her treatment while she waited to be let go from the hospital; her son and daughter in Chicago had refused to pay the bill, arguing that the large number of siblings in Kenya should raise the money by contributing amongst themselves. As the impasse continued, Ruth called her oldest son in Nairobi, and during their heated conversation she told him that the family’s economic security was in large part a result of the remittances from America. He responded by telling her to henceforth inform her Chicago children of her needs. After another week, her Chicago daughter sent the money, and contact between the siblings was discontinued for several weeks as hard feelings were nursed.   

Dense networks of mobile money result from strategies that value reciprocity, communication and trust.  Reciprocity and closure are the most valued forms of social capital in the mobile money networks of Kenyans, and these often leave individuals, even brokers, unable to accumulate the resources they need. A request cannot be denied; instead one’s phone must be shut off or “lost” to avoid pressure for remittances. In a working paper for IMTFI, we examined how gender is reflected in mobile money networks in matrilineal ties, in the centrality of mothers and grandmothers, in the strong patterns of reciprocity that make receivers also senders, and in polygynous families where money is from those with resources to those without: from men to women. Gendered flows of mobile money provide a safety net and reduce risk, but often the resources sent are not enough, or cannot be held on to long enough, to prevent a mother from languishing in the hospital while her children squabble over the bill. Mobile money may simply provide a new technological means through which women cope in societies where they are marginalized from resources and wealth: by relying on their children, siblings, and others in their social network for the emergencies and needs of daily life.  

Read Sibel Kusimba's full working paper, "Social Networks of Mobile Money in Kenya".