Thursday, July 30, 2015

6 Multicultural Money Lessons Worth Learning

"Customs may seem odd to outsiders but they're rife with meaning that can whisper valuable lessons to those who are willing to listen," Matt Alderton over at CreditCardGuide explains. "That's especially true of financial customs, according to cultural anthropologist Dr. Bill Maurer, a professor at the University of California, Irvine, and director of the Institute for Money, Technology and Financial Inclusion....."

Matt Alderton/ CreditCardGuide
"3. African culture
In Africa, money isn't the only “money.” “When you and I think of money, we think of cash and coin, or funds available in an electronic account,” Maurer says. “But in many places around the world, like rural Kenya, people add into the mix other things like animals, access to land or even kinship relationships … Lots of things can perform the stored-value function of money....”

Read on for the other 5 cultural meanings and lessons on money from around the world. 

Tuesday, July 28, 2015

The Domino Effect of Electronic Benefits Transfers to Children

The project titled “Exploring the nature, scope and feasibility of existing technological infrastructure of India’s National e-Governance Plan’s (NeGP) Customer Service Centre scheme towards converting in-cash transactions into cashless transactions” aimed at studying the systems and processes employed by NeGP to deliver financial services to the last mile. In the process, we observed that children handle virtual money or electronic transactions in a very sophisticated fashion. This led us to think of ways this behavior could have longer-term implications on a household’s financial behavior.

Cash transfer programs, in various forms, have been implemented globally as a poverty reduction measure. Both conditional and unconditional cash transfers have been tested and proved to have their own pros and cons. Mechanisms have also been tried where these transfers are made through women in the family to ensure that the money is not squandered and is used for the welfare of the respective household. In 2013, the Indian government implemented a direct cash transfer scheme whereby money is directly transferred to beneficiaries’ bank accounts. All government subsidies, pension payments, scholarships, employment guarantee scheme payments, and other welfare payments are routed through this channel, called Electronic Benefits Transfers (EBT). In a typical poor household, the beneficiaries of these EBTs could be a school-going child for his scholarship, an elderly person for his or her pension, and a head of the household for subsidies. All three receive bank accounts where they get their transfers. We studied these three kinds of beneficiaries and the factors that influence their financial behavior. How they utilize their respective transfers and bank accounts (i.e. their financial behavior), depends on their financial awareness, preferences, and experience with financial products.  

First, the elderly have very strong beliefs in their experience and often have a hard time changing their perceptions. It is difficult to make them believe in technology and they are more likely to use transfers to contribute to household expense.

Second, heads of household are more likely to adapt to the financial environment but given that they are burdened with a high dependence ratio in the family, they don’t experiment with money or invest in risky ventures. Trust in an available financial service becomes a very important factor that motivates them to save or make a financial investment with the EBT service. Their preferences change frequently as they do for any poor household because they are prone to high uncertainty and risk with employment and steady cash flow. Heads of household consider the transfers as additional income and try to use it for consumption smoothening; the bank accounts opened for the purpose of receiving welfare payments essentially remain dormant.

Third, schoolchildren’s financial behavior is at a completely different level as they are curious and often have a steep learning curve, have no obligations towards family, are open to new thoughts, ideas and innovations, and are fascinated by technology. School children are socially active and are influenced by people around them, such as friends and teachers at school. They are at a stage where independence excites them and they look forward to growing up as an adult.

The project required us to visit some of the kiosks or centres that provided technology facilitating cashless transactions and banking services. During our visits and through our discussions with various stakeholders we observed that the majority of foot traffic at these centres is from school children. Long queues of school children dressed in uniforms was a common sight across the thirty centres that were studied. Upon further investigation, we found that this segment of customers came in to access their bank accounts in which they receive their scholarships for education, uniforms and books. To our surprise, these children were sophisticated enough to not withdraw the entire amount in one go and use it as a channel to save by making small deposits and withdrawing small sums. This is in complete contrast to the behavior exhibited by adults. It is more of a fun activity for these children and they feel ownership of their bank accounts. EBTs and accessibility to a kiosk like terminal indicates a positive externality of this technology that is providing a practical exposure to money management at a very early age. Given that these children go to school where they are educated on numeracy and other money and currency related aspects, they are more likely to understand the principles of saving, borrowing, cash handling, investments, etc. using such platforms that provide real time experience.

It has been globally realized that the major barrier towards financial inclusion is lack of financial literacy[1]. Though the financial landscape for the poor is being increasingly diversified and customized, it is too complex for many of them to understand and make use of the varied financial services. Educating heads of poor households at this age has proved to be difficult especially on subjects such as insurance and pensions. Enabling households to weigh their debt and saving options also becomes difficult in most rural settings. Here experts suggest using innovative methods of financial literacy and advocate the importance of reaching out to people with relevant concepts at the time when they need them the most or have an ability to understand them the most. For instance, when children are 13-17 years of age and go to school, they can be taught about simple money management tools and techniques. EBT and kiosk banking is making this happen unintentionally. Additionally, when children visit kiosks to do transactions they are also exposed to a lot of information about other financial products. This entire package of EBT, financial education at school, and practical exposure and financial awareness at kiosks might eventually make these children more financially independent when they grow up. They are more likely to be confident about their money related decisions as compared to their parents. These outcomes, though important, are longer term in nature and difficult to measure scientifically.

The other outcome of this package that has immediate and larger implications for financial inclusion is the domino effect to the family’s financial behavior. This is how a chain reaction happens or is expected to happen. School-going teenagers are educated on basic numeracy and financial management aspects. They also receive a bank account where they get scholarship money. Because they are minors (i.e. under 18 years of age), the account must be opened with an adult (i.e. one of their parents). Given this opportunity to handle money at an early age, teenagers are exposed to a lot of information about other financial services that they can share with their family and friends. This information trickles down (or up) from child to parent and might make parents more willing to try new products and services. Parents see their child operating their bank account and observe and learn from their savings activities. Women are seen to be using credit or cash in hand for activities like education, consumption smoothing, saving instruments etc. that are beneficial to the household as a whole[2]. Therefore, of the two parents, mothers are more likely to be influenced by the process of information sharing and knowledge transfer and they can then try to educate the rest of the family.

In all, EBT payments made to children influence and change the financial behavior of the entire family. This domino effect is crucial to understand as policymakers and practitioners are making efforts to make people financially aware so that they can utilize the services available in the best possible manner. But a nuanced understanding of the approach is still missing. If this link between the child (a future decision maker) and the parents (current decision makers) is strong and is proven to work then this could be an answer to the ‘how’ of financial inclusion. Efforts need to be made at educational institutions to make the entire process more formalized and structured. Additionally, the kiosks could also be used as Financial Literacy and Credit Counseling (FLCC) Centres[3] with a more specified role. Apart from these immediate steps, a rigorous research study requires to be done to provide evidence of these effects so that stronger and more generalizable recommendations can be drawn. We are taking steps in this regard by disseminating these ideas to the concerned institutions in India and by furnishing the required proposal for further research. 

Read more in Parul Agarwal and Amulya Krishna Champatiray's Final report titled Kiosk Banking: The Challenges to and Implications of Building an Inclusive Financial Infrastructure.

[1] Tufano, P, T Flacke and NW Maynard (2010), ‘Better financial decision making among low-income and minority groups’, RAND Corporation
Cole, S, T Sampson and B Zia (2009), ‘Valuing financial literacy training’, World Bank
Umapathy, D, P Agarwal and S Sadhu (2012), ‘Evaluation of financial literacy training programmes in India: A scoping study’, Centre for Microfinance, IFMR-LEAD
[2] Banerjee (2009), ‘The miracle of microfinance: evidence from a randomized evaluation’, Centre for Microfinance Working paper series No. 31

Monday, July 20, 2015

The Contingency Fund and the Thirteenth Cow: ICTs in a Coming of Age Ritual in Western Kenya (Part 2)

By IMTFI Researchers Sibel Kusimba, Gabriel Kunyu, and Alex Wanyama

In Part 2 of this blog post, we discuss the role of mobile money accounts in a coming of age ritual for adolescent boys that took place in Western Kenya in 2014 among the Bukusu ethnic group. In Part 1, we discussed the barriers to mobile phone use in the ceremony.

Returning from khocha with the thirteenth cow, Chwele, Kenya, August 2014. 
Mobile money had an important, but private place in this ritual. The digital wallet was widely used to save money for upcoming preparations. Many fathers sold a significant asset such as a cow or a tree before the ceremony, or sought a loan from a SACCO or help from relatives. Women drew savings group payouts. These funds were often saved on a phone (although “secret places” and bank accounts were also used) and went towards purchasing a feasting bull and, for some families, brewing the sacred millet beer served during a night-long community moon-dance (khuminya). The ancestors join the drinking party for a father and his age-mates, sitting under a small straw hut in the circle around the beer pot.

One of our fathers had saved about 1500 shillings ($20) on his phone, most of it amassed from donations from his age mates – who would be honored guests at the beer party. This “contingency fund” – his own tongue in cheek name - came in handy when the beer ran out, and his younger brother ran to a neighbor to purchase moonshine to continue the festivities.   

At other phases of the ritual the private storage capability also comes in handy. Mothers use the mobile wallet to store e-money gifts and cash gifts converted to e-money.

An important visit of the ritual is to the mother’s brother (khulanga khocha). This visit is a symbolic goodbye before the boy leaves the care of his maternal relatives and joins his father’s lineage. Khocha gives his nephew “the thirteenth cow” - so-called to reference and “return” the customary bridewealth of twelve cows passed from groom’s to bride’s parents.

Often the boy, the thirteenth cow, and their entourage form a colorful parade on the way home from the khocha, the boy dancing with his bells and the thirteenth cow adorned with a colorful cloth and flowers in his horns. Some fathers hired a truck to carry the entourage and the thirteenth cow home in style. Such social display increases the cow’s value as an informal savings mechanism.

The thirteenth cow expresses many meanings: the solidarity of the patriline, its success in extracting a cow from its in-laws, the parents’ marital harmony and respect for in-laws and ancestors, and the elders’ gracious ceding of social power and resources to the next generation with the passage of time. Women told us that the animal embodies blessings to the boy and his mother and that “my people are still here for me” – a woman is not forgotten in marriage.   

Much phone-mediated communication assists women who look for the thirteenth cow from one of their relatives. Today, the thirteenth cow is a young animal usually purchased at an elevated price during the festival season. In some cases khocha pledged some amount, often less than the cost of the thirteenth cow (about 12,000 shillings or $140.00) towards the boy’s school fees; or gave a goat (for which the going rate is about 3500 shillings); or even in one case, sent an M-PESA gift of a few hundred.

Live animal gifts were spoken of frankly as investments that the boy’s father would raise and nurture as part of the family stock; they would contribute to producing more animals, provide milk, and likely be sold for school fees. In our research instruments we asked for the purpose of gifts, which for animals was almost always listed as “for fees.” In other words, the thirteenth cow is purchased, gifted, nurtured, and then converted into school fees (M→C13→SF). 

In the ritual, digital money had important capabilities, including value storage and privacy (Mas, 2013). These capabilities ensured a generous feast that would bring honor to the boy’s family. The benefits of the seamless digital “ecosystem” aside, however, we also discovered that people often prefer the ability to use digital money together with other kinds of value, and convert one kind into another. The conversion M→C13→SF indicates the continued importance of livestock as a savings vehicle and expresses the khocha’s respect for his sister and in-laws. Purchased at elevated prices, bridewealth cattle link people with life forces that unfold the generations over time.  

In this ritual, the public display of bridewealth cattle gifts, intended to be reared and sold for school fees, spoke to current economic pressures not through the ease of the mobile, but through shared and enduring metaphors of wealth in Bukusu culture. 

Going back to our jet-setting businessman in the Safaricom advertisement in Part 1, paying school fees from his airplane seat – if he is the khocha, the people back home might wonder why he is not attending this year’s festivities. He might be on a flight from Nairobi to Kitale, where there is a small airport. From there it is about an hour’s drive to Bungoma. Maybe he intends to show up after all? 

Mas, I. (2013). Better than Cash, or Just Better Cash? Retrieved from

See The Contingency Fund and the Thirteenth Cow: ICTs in a Coming of Age Ritual in Western Kenya (Part 1)
See Sibel Kusimba's blog post on network effects

Link to Sibel Kusimba, Gabriel Kunyu, and Alexander Wanyama's Final Report

Monday, July 13, 2015

The Contingency Fund and the Thirteenth Cow: ICTs in a Coming of Age Ritual in Western Kenya (Part 1)

By IMTFI Researchers Sibel Kusimba, Gabriel Kunyu, and Alex Wanyama

A mother shops online from her well-appointed living room while her contented children play games on a mobile phone; a jet-setting businessman pays school fees from his airplane seat; and families enjoy soccer games viewed on a tablet. In Safaricom’s advertising, mobile phones and mobile money serve a prosperous, urban middle class. Ads showcase the wider digital “ecosystem” of bank connectivity, microcredit, and bill payment that could become one of the world’s first “cash-light” economies.

The ease of digital money helps the urban Kenyan, an entrepreneur and a customer, carve “leisure time” out of a day’s work (Gajjala & Tetteh, 2014; Kuriyan, Nafus, & Mainwaring, 2012). “Relax, you’ve got M-PESA” is the tag, the barriers and frustrations of poor infrastructure now rendered trivial by a mobile’s capacity to collapse time and space. 
Figure 1: An initiate (in beads and colobus monkey headdress) receives two goats from a relative during the visiting ritual. 
Notice the use of mobile phone to capture the event (left side of photo) and the T-shirt that reads, “Don’t take my number – nichecki kwa (check me out on) Facebook.” Saboti, Kenya, August 2014. 

When depicting traditional and customary life – a businessman at his desk, coaxing his rural hens to lay via mobile, or a rural mother on the phone, hoe slung across her shoulders - the ads evoke an ironic clash of traditional and modern in which Kenyan viewers delight. Even as they identify with images of success and worldliness in Safaricom’s advertising, Kenyans rejoice in customary life in rural areas, where rituals and ceremonies reinvigorate ties of family and ethnic identity. Here they apprehend a very different sense of time – not the disciplined balance between “work” and “leisure,” but their connections to the ancestors and eternity.
The coming of age ceremony for adolescent boys is still a fundamental rite of personhood among the Bukusu people of Western Kenya, although it takes many forms along the continuum from traditional to “Christian.” The ritual is a public display of rich, visual symbols, songs, and performances which confirm the changing status of a boy into a man and celebrate the enduring covenant among the living generations, the ancestors, and supernatural forces.   
During our research we worked with more than 40 families who participated in the ritual in August of 2014. Mobile phones were widely used to plan and coordinate phases of ritual. Through digital money transfer, households shared the considerable costs of the ceremonial feast. Furthermore the mobile wallet was a private and personal savings device that allowed households to amass and preserve funds in advance of the ritual’s many phases. 
Nevertheless mobiles presented a variety of social dilemmas around this medium and its messages. The very ability of ICTs to make things easier disrupted the expectations of reciprocity among generations and kin groups the ritual affirms, and spoke to elders’ anxieties around the increased mobility of women and youth. 
During the first phase of the ritual, khulanga or “to call,” boys don a colorful costume adorned with bells and visit relatives accompanied by siblings and age mates, dancing for them to invite them to the ceremony. All of the families in our sample called or texted between 50-100 or more invitations to friends and relatives, shortening the visiting phase somewhat.
Close relatives and elders, however, insisted on being visited in person “right up to the doorstep” to receive the gift of a cow or goat, a symbol of reciprocity between the generations. None of the families in our sample left out face-to-face visiting of key relatives like grandparents. In the words of one elder: 
When we inherited this from our forefathers, they were sending us with bells up to the doorstep. When he reached the doorstep he would give you an animal. A four-legged animal. That is to show their appreciation. You have honored your elders and respected them. You will also be honored when it is your turn. And when you call him on the phone he will just tell you, I am not a kid to be called on the phone. 
For many elders the mobile’s ability to disconnect time, space, and sensory experience associated it with dishonesty; they felt that marital discord, dishonesty and conflict had increased in their communities, “because of the phone.”As such the public and shared experience of the ritual was even more important today, they said. 
One elder expressed dissatisfaction with his feature phone as an instrument of deception, and offered that an optimally designed phone would allow him to see and spatially monitor the whereabouts of his wives and children. It appears there is a market for smartphones among the elders of Western Kenya!
Gajjala, R., & Tetteh, D. (2014). Relax , You’ve Got M-PESA: Leisure as Empowerment. Information and Communication for Development, 10(3), 31–46.
Kuriyan, R., Nafus, D., & Mainwaring, S. (2012). Consumption, Technology, and Development: The “Poor” as “Consumer.” Information Technology and International Development, 8(1), 1–12.
Mas, I. (2013). Better than Cash, or Just Better Cash? Retrieved from

Stay tuned for The Contingency Fund and the Thirteenth Cow: ICTs in a Coming of Age Ritual in Western Kenya (Part 2)
See Sibel Kusimba's blog post on network effects

Monday, July 6, 2015

DINERO MÓVIL: Los servicios financieros a través del teléfono conquistan los países en desarrollo del Sur

Somalilandia (Photo: El País/Planeta Futuro)
This fascinating report titled Dinero Móvil: Los servicios financieros a través del teléfono conquistan los países en desarollo del Sur (Mobile Money: Financial services via telephone conquer developing countries of the South) by Marco Bello and IMTFI Fellow Gianlucca Iazzolino provides a comprehensive comparative analysis of three regions that live on international remittances, have little access to formal financial services and where there has been a rapid spread of mobile phone and mobile money use. In the "non-existent country" of Somaliland, the Zaad mobile money service is driving inflation and dollarization of the economy because it deals only in US dollars and not Somaliland shillings. In post-earthquake Haiti, mobile money services like Thco-Tcho Mobile (TTM) and Lajancash have become popular mainly among the middle-class and not the poorest of the poor because of the transfer fees and documents needed to open accounts. Haitians are also afraid of money "disappearing" and therefore only deposit smaller amounts into mobile wallets. In Burkina Faso, where even illiterate elders know how to navigate mobile phones, services like Airtel Money and Mobi Cash are making strides in providing more effective mobile money transfer as well as microcredit loan repayment options. In the 2012 food crisis in the Sahel region of northern Burkina Faso, Oxfam tested delivering aid funds to beneficiaries through mobile money and found it to be more cost effective and less risky.

Read the Somaliland piece in English here.

Read the entire report in Spanish here.

Thursday, July 2, 2015

Free Special Issue of ITID

A new, special issue of the journal Information Technologies and International Development (ITID), co-edited by IMTFI external advisory board's Jonathan Donner, is now freely available at the ITID website.

ITID is an interdisciplinary open-access journal that focuses on the intersection of information and communication technologies (ICTs) with the "other four billion" – the share of the world population whose countries are not yet widely connected to the Internet nor widely considered in the design of new information technologies.

From Jonathan's blog and the introduction to the special issue:
"Taking these articles together, we gain a fuller picture of the roles and impacts of information access on ongoing development processes, including not only the design and use of specific technological solutions, but also their relationships to specific user, social, and policy contexts. As digital access grows in developing countries, we can imagine that these findings will be relevant to a broad range of both public and private actors seeking to better understand the design, uses, and impacts of ICTs in developing countries."