Tuesday, March 10, 2015

IMTFI and Financial Inclusion Research: Reflections, Connections, and What's Next

By IMTFI graduate research assistant Stephen C. Rea 

At IMTFI's sixth annual conference in December 2014, I had the opportunity to sit down with several past and present research fellows to discuss their experiences with IMTFI, as well as timely issues in financial inclusion. Although they come from different institutional and disciplinary backgrounds, did research in different places, and examined different technologies, communities, and financial practices, five common themes emerged from our discussions: comparative work across different scales; collaborations and partnerships with a wide range of actors; qualitative research as a complement to quantitative analysis; IMTFI's role in helping to build a global network of researchers; and rethinking financial inclusion. 

Vivian Dzokoto (Photo by Steve McCord)
Looking at financial inclusion projects alongside the different social, cultural, and infrastructural contexts is crucial to understanding why an approach that may work in one community fails to take hold in another. “A lot of the discourse on mobile money is—of course—about M-Pesa,” Vivian Dzokoto told me. “And then you look in other African markets and you realize that the behaviors are not the same, the attitudes are not the same, the potential is not the same, and so it's very important not to assume that one size fits all.” Comparative work can help elucidate some of the contingencies and unexpected obstacles that, for example, a new mobile money service might encounter, and therefore help financial services providers rethink their strategies. 

Comparison is also helpful for getting a better sense of the myriad actors and interests in financial inclusion efforts at different scales. “I think I've become more curious,” Anatoly “Jing” Gusto explained, “trying to know more and hear more stories, both from indigenous peoples from my country as well as experts from different parts of the world.” In other words, one of the most valuable things about comparing scales is putting voices alongside each other—like those of indigenous groups and of central bankers—that otherwise might never be considered together.

Anatoly "Jing" Gusto (Photo by Steve McCord)
All of the researchers emphasized how their involvement with IMTFI had afforded them opportunities to collaborate with people and organizations working on financial inclusion inside and outside of academia. Jing shared that his experience allowed him to interact with institutions as disparate as the Alliance for Financial Inclusion, the Better Than Cash Alliance, and the Central Bank of the Philippines. “One of the takeaways for me when I attended the Alliance for Financial Inclusion's Global Policy Forum,” he continued, “was that there's a need for evidence-based policy formulation. A lot of our policymakers probably still need help in terms of finding what we can call a human-centered kind of policy that can produce the right program or right intervention for the target beneficiaries. And the research studies that are being carried out by people here in the IMTFI can guide them in terms of really knowing how people think, and really seeing the pros and cons of past and maybe future policies.” 

Erin Taylor agreed, explaining how IMTFI researchers' participation in policy discussions can provide a much needed “on the ground” perspective: “We were talking with a senior economist in a government institution the other day and he said to me that he's always sending consultants out to the field, and while they come back with these amazing stories about what people are up to—pretty pictures and everything—they don't tell him why people behave the way they do.” IMTFI researchers can bring their practical and theoretical expertise to partnerships with policymakers, the financial services industry, telecommunications companies, NGOs, and more to help fill these gaps in knowledge about people and their financial practices. But it's not just a one-way street; as Erin pointed out, “I think it's really important that we use things like the IMTFI's research network and branch out more broadly beyond our own disciplinary perspectives or our own sectors that we work in, in order to share information and knowledge. Otherwise how are you going to improve the research that you do?”

Qualitative research
Deepti KC (Photo by Steve McCord)
IMTFI prides itself on funding research projects with strong qualitative components. The hope is that ethnographic research will complement statistical analyses in helping to illuminate connections that could easily be overlooked. Deepti KC has extensive professional experience with doing quantitative work, but her IMTFI-funded research allowed her to work with qualitative methods for the first time. “I was spending time with women, and suddenly they were not just respondents for me,” she remembered. “They were human beings, they were people with emotions and they had their own lifestyles. Before that, I think I had more sympathy for the poor, but after this experience I don't have sympathy: I am more empathetic towards them! Because who are we to tell them what is right and wrong?”

Ana Echeverry said that qualitative research is “what really points to new findings, to new ways of analyzing problems.” She continued, “When you see people in action, in their environment, facing challenges in everyday life, and start asking 'Why do you do that? Why not instead of doing X or Y, you chose to do this?' then people start thinking, and start bringing new perspectives into contrast. So qualitative research provides insights into how people see their lives, their way of thinking.” Vivian added that listening to people who actually use a given financial service or product is important for industry and design: “One of the themes that has come up in a lot of IMTFI work is the fact that it's very important to understand the consumer,” she said. “And in order to understand the consumer, you have to understand how the consumer thinks, what the consumer wants. Paying attention to that kind of information—in addition to what people are already doing in the world—is important in terms of designing new financial products.” Jing reiterated how qualitative work complements quantitative approaches in this respect, saying that “qualitative research methodologies allow you to hear and understand the aspirational part” or what people are trying to tell you. Without qualitative research, “the picture won't be complete, you won't really understand the problem, and accordingly you won't be able to design the right solution without seeing the complete picture.”

IMTFI's research network
At the mid-point of their fieldwork, IMTFI's fellows convene at UC-Irvine to share the progress that they have made in their research. This annual conference is a chance for them to get feedback on their projects, and also to forge new connections with other researchers and interested parties. For Jing, research and networking complement each other. He told me that projects “won't be complete if you just do research and stop.” The conference provides researchers with a platform to communicate their work, and helps them build networks that they can draw upon long after the conference has ended. But without good research first—the “real meat,” as Jing put it—then it's difficult to maintain those networks. He added, “I think that having research on one side and then having the desire to connect with somebody, not only just to tell something, but in order to find something together, will make it, I think, a better story for everyone.”

Erin Taylor (Photo By Steve McCord)
It was Erin's third time attending the conference, and she explained how IMTFI's research network has grown stronger: “I think that's really important,” she said. “Now that there is consolidation, we're in a far better position to actually help each other move forward. It's really good that it's been such a longer term project rather than something that was a one off.” Vivian echoed Jing and Erin, noting that wherever she might want data to compare with her own, there was a good chance that she knew someone there already through IMTFI: “I know that if I ever need to collect data in Ethiopia, someone's there. If I need data from Botswana we have an IMTFI person there. It's nice to know that we belong to this network of people all over the world who are really interested in the same thing.”

Financial inclusion: looking forward
“Financial inclusion” was still rather novel when IMTFI funded its first research cohort, but now it is in danger of being taken for granted. As the past six years have taught us, financial inclusion can have several meanings and look rather different depending on who you talk to. IMTFI's researchers have helped promote financial inclusion as a political, social, philanthropic, business, and research agenda, and now they are drawing on their practical experiences in order to evaluate its successes and failures. More importantly, their critical reflections on what financial inclusion is and why it's important continue to drive the conversation forward.

Ana Echeverry (Photo by Steve McCord)
Ana defined financial inclusion as something that is inherently social. “Financial inclusion is not about government and the banking system designing how to get people to open more bank accounts,” she said. “It is about how I interact with other human beings, how I make my transactions with you.” In the course of her research, Deepti has begun to think about financial inclusion not in terms of access, but in terms of use. Recently, more attention has been given to issues specific to women and girls' participation in financial inclusion, something that Deepti is very concerned about. “I'm interested in understanding if financial service providers really understand what women want,” she said. “Are they just designing for the sake of designing without even understanding? We talk about financial inclusion, and we think if you open a bank account you are financially included. But if people are not using it, then you are not financially included.”

“I've really started thinking about financial inclusion more broadly as financial well-being,” Erin said. For example, a person can be excluded from formal financial services but still be relatively satisfied with the range of available informal services, and by the same token people who are already included don't always have the most stable financial lives. In other words, understanding financial inclusion is not just about expanding access, but also about improving well-being will be critical going forward. “I think if we can focus on that, we have a better chance of addressing that issue of what is good for people as financial beings, and taking it to a global perspective.”

Learn more about these researchers' work: Consumer Finance Methods: Global Approaches and Methods; Betting on Chance in Colombia;  Snapshots of Gender and Financial Inclusion; Female Financial Literacy; Jing Gusto's IMTFI blog post on AFI Global Policy Forum 2013, Barriers to Mobile Money Transfer Uptake in Ghana.

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