Monday, February 29, 2016

Juggling Currencies Across Borders (Mexico/US): An Ethnographic Film

This research project entailed a keen exploration of currency flows in two border areas: first, the twin cities of Mexicali, Mexico and Calexico, U.S., and second, Sabinilla a rural community in the mountains of Jalisco that has close ties with the Mexican diaspora in Hawaii. One of the key issues that emerged was the velocities of currencies circulating in multiple directions across national borders. This played a critical role in the social construction of value and in forging and managing local and transnational socio-economic relationships. 

As part of the project, the research team produced an ethnographic film titled, Juggling Currencies, that shows the ways people juggle and mobilize several social currencies in their everyday lives and the impact it has on employment, remittances, income and costs of living. The video poetically juxtaposes socio-economic practices of negotiating and converting different social currencies with footage of jugglers and other circus performers at the Periplo Festival Internacional de Circo 2015 filmed in Guadalajara, Mexico. 

In the video we encounter commuters between Mexicali and Calexico that resort to using diverse currencies. We might think that money flows predominantly from the U.S. to Mexico, but this is not necessarily the case. Those living in these border areas earn a living on both sides of the international dividing line, and much of these earnings are spent in the U.S. on commodities that are then transported to Mexico. Our research findings show that a great portion of these cross-border transactions involve non-monetary currencies such as goods and services, but also information. Most of these are exchanges are undocumented and in fact unknown, but as the video depicts, they involve multiple currencies traveling at different velocities.

Border Crossing
Enrique, for example, who finally has double nationality, after having sought American citizenship for many years. He resides in both countries: his children study in the U.S. and he works in Mexico, so he commutes back and forth at least twice a week. His hard-earned pesos are mostly spent in the U.S. acquiring groceries, electronics and other supplies for his house. In order to make ends meet, he lends out his social security number that is a social currency. Because the person borrowing his number is an agricultural worker in the U.S., Enrique can register work history in the U.S., and thus be eligible for credit to buy property, receive tax returns, and increase his earnings upon retirement. 

Bringing Goods Home from Calexico
Enrique is extremely careful with his documents because he does not want to lose his American citizenship. He does not rent out his social security number, nor does he seek unemployment benefits, both of which could earn him quick short-term cash. Instead he prefers to keep this circuit at lower ‘speed’ in order to earn medium and long-term benefits by prioritizing the value of his legal status and also by reinforcing the social networks that enable and ensure the continuation of these transactions in the future. This contrasts with ‘higher-speed’ currency exchanges involving gains and losses from the everyday fluctuations in the value of the peso. People living on the border state that the first thing they check when they wake up is the value of the peso.

The video also takes viewers to rural Sabinilla in Western Mexico where local and translocal networks are used for countless activities: from one brother helping another to plant his field in exchange for the loan of a horse, to distant relatives paying coyotes for helping their family cross from Mexico into the U.S., to the Mexican Diaspora in Hawaii sending remittances to their family in Sabinilla for improving their homes and expanding livelihood opportunities. These networks and exchange circuits are also social currencies operating at different velocities to activate and channel resources for resolving problems. 

In addition, we get a sense of the particular challenges, contingencies and temporal rhythms of life in Sabinilla. For instance, we meet Doña Elba and her daughter Chave. Every morning Elba waits for the old beat-up tortilla truck that comes bouncing down the village roads. The truck picks up the villagers’ milk and sells them tortillas; vastly inferior machine-made tortillas that come from the neighboring town of San José. The villagers in Sabinilla do plant their own
maize but it is mostly grown to subsidize the price of keeping cows. The milk of these cows is shipped off on the same truck that brings the tortillas. The liters of milk vended less the kilos of tortillas bought are recorded in a ledger and the remaining balance is paid to the farmer at the end of the week. The tortilla truck is the conduit through which Sabinilla is nested in the broader economy as farmers trade their milk for mass-produced tortillas. It also demonstrates the vulnerability of folks in Sabinilla. Villagers like Elba are constantly worried when the truck is late or does not show up because milk is highly perishable. Even though the milk could be used to make cheese, it is more laborious and requires skill. More importantly the sale of cheese is slower than that of milk, and would therefore disrupt regular weekly cash flows. 

These excerpts provide a flavor of the people, places, stories and social and economic issues presented in this film that illustrates the various ways people juggle and negotiate the temporalities and velocities of different social currencies in their everyday lives.

Link to blogpost #1: Juggling Currencies in Transborder Contexts (Intro)"

Link to blogpost #2: "Juggling Currencies in Transborder Contexts: Field Notes from Sabinilla and Calexico (Part 1)"

Link to blogpost #3: "Juggling Currencies in Transborder Contexts: Field Notes from Sabinilla and Calexico (Part 2)"

Link to film: "Juggling Currencies" (40min)

Tuesday, February 23, 2016

Final Report - Mobile Money Utility & Financial Inclusion: Insights from Unbanked Poor End-Users in Nigeria and Ghana

The comparative report from Lite J. Nartey and Olayinka David-West exploring dynamics of mobile money utility amongst poor unbanked users in Nigeria and Ghana has just been released. Filled with analyses, research tools, and informative wordles, and colorful infographics. View the full report here.

Ghana: Non-User General Trust Perceptions of Banks Vs. Telcos

Nigeria: Detailed Non-User Trust Perceptions of Banks vs. Telcos

Sample of concluding insights:
• The mobile money services offered are basic and ranked at the bottom of the hierarchy of consumer financial needs.
• Although the mobile money services offered are supported by a myriad of value creation and delivery processes, the low adoption levels are indicative of additional efforts in the value delivery activities like market development and segmentation.
• Direct marketing is a useful tool to encouraging both awareness and a better understanding of the product. However, more needs to be done to increase base awareness and actually encourage users to try to these platforms.
• In Nigeria, the relatively low adoption and utility rates do not support innovative uses by the targeted users.
• In Ghana, despite the low adoption rate, the service is highly favored amongst those that actually do use it.
• The use of informal savings schemes like susu or ajo that provide savers with a pool of funds to facilitate substantial payments are a popular and preferred savings method. The use of transportation services is a substitute for remittance services; however, the transfer and resale of mobile airtime are also employed for small amounts.

blogpost summarizing key findings.

Wednesday, February 17, 2016

Comics help women become super savers in India: see the pages

Research by IMTFI fellows Deepti KC and Mudita Tiwari part 2 featured in The Guardian Visa Partner Zone 

Deepti KC and Mudita Tiwari's  comic books to help women from low-income communities to save money features eight illustrated tales document the financial problems – based on real life in Mumbai – that the female characters face, and how they resolve crises through managing and modifying behaviors.

Comic books about characters like themselves help women in India and other developing economies learn about personal finances. Photograph: IMTFI and IFMR LEAD
"From the slums of India, two comic book heroines have sprung."
Researchers found that any tool meant to educate women about the power of a safe, informal banking channel must appeal to children and women, be respectful, and show the challenges that female entrepreneurs face when managing their income without access to convenient financial services. 

A comic book and illustrated characters mirroring these women provides the perfect, immersive vehicle. So Tiwari and KC worked with worked with Creative Rats, a design and illustration company based in Baroda, India. With its creative director, Ritesh Gohil as illustrator, the comics tell stories of two relatable characters – Saraswati, a vegetable vendor, and Radha who works at a factory making thin, crisp wafers called “papad”. Both work in a big urban slum."

View pages of the comics in Part 2 of this blogpost from The Guardian please visit:

Tuesday, February 16, 2016

See you in the funny papers: women love comics about financial literacy

Research by IMTFI fellows Deepti KC and Mudita Tiwari featured in The Guardian Visa Partner Zone 

Studies show women in developing countries aren’t impressed with conventional financial literacy resources – and few of them use formal bank accounts. In India, comic books and illustrated characters have become successful education tools comic illustration financial literacy education tool Indian women
Comics proved successful in teaching women in India about personal finances. 
Photograph: IMTFI and IFMR LEAD
"Deepti KC and Mudita Tiwari always wanted to help women from low-income communities to save money. Having both grown up in Jharkhand, India – and KC, additionally, in Nepal – they knew firsthand the struggles of low income and lower caste women to get ahead. “Women must run their households, feed their children, save for healthcare expenses and their children’s future education – all on a limited salary. And many are single mothers too, maintaining the financial weight on their shoulders,” Tiwari says.

So in 2012, as researchers with the Institute for Money, Technology and Financial Inclusion (IMTFI), housed within the University of California, Irvine, the pair traveled to India to launch a financial literacy campaign for women. “This audience seemed most affected by the banks not including them within their channels,” Tiwari explains.

They eventually realized that any tool meant to educate women about the power of a safe, informal banking channel must appeal to children and women, be respectful, and show the challenges that female entrepreneurs face when managing their income without access to convenient financial services. As it turns out, comic book and illustrated characters mirroring these women provides the perfect, immersive vehicle.

Mudita and KC see additional use for their free, downloadable financial literacy materials, including partnering with evangelists and technology providers to help distribute their product to nonprofits working with low-income women. Android and iPhone apps will help nonprofits adapt the materials.

The two also suggest that banks:
  • Make women the front and center in any marketing materials to ensure products and campaigns are authentic and actually appeal to them.
  • Be empathetic. Understand the obstacles that slum women face when saving, like household conflicts, living in a male-dominated society and having no time to spare for standing in a long bank line. Use characters and models resembling the market: female entrepreneurs from poor households.
  • Provide female officers to speak sensitively to women at banks and post offices – only then will those customers feel comfortable asking questions.
  • Extend brick and mortar banks’ hours to 8pm. Ensure in high-density areas that ATMs don’t run out of cash or shut down.
  • Help employers provide more automatic savings options."

Find pdf of the feature story from The Guardian here.

Deepti KC has a Bachelor’s degree in Civil and Environmental Engineering from the National Institute of Technology (NIT) – Jaipur and has a Master’s degree in Environmental and Public Health Engineering. She also has a Master’s degree in Fundraising Management and Nonprofit Administration from Columbia University.  Deepti currently works as a Senior Manager and is involved in carrying out several research projects relating to financial inclusion.

Mudita Tiwari holds a Master's in Public Policy and a Master's in Public Health (Epidemiology/Biostatics) from the University of California, Berkeley, and a B.B.A in Information Technology from Cleveland State University. At CMF, she is working on research evaluating the impact of microfinance, financial inclusion, financial literacy programs, and agricultural financing programs in the states of Uttar Pradesh, Bihar, Maharashtra, Punjab, Tamil Nadu, and West Bengal.

The full report of their research can be found here

Monday, February 8, 2016

Infrastructures and Interfaces: Domestic Remittances in India

by IMTFI Researcher Amrit Pal

On a hot and humid September afternoon Bhiwandi is bustling with activity. Located a few miles outside the megacity of Mumbai (formerly Bombay), Bhiwandi is an ideal residence for millions of migrants who are drawn by the opportunities the city has to offer, without having to pay skyrocketing rents. Population estimates vary from 12 million to 20 million, depending on the source and scope of measurement.

Workers at a hardware store in New Delhi, India, 
use a cellphone for remittances. (Photo by Amrit Pal)
At a neighborhood kiosk, we meet Mahinder* who is on his way back home after a long shift at the local handloom. Mahinder migrated to Mumbai 7 years ago from Bihar, one of India’s poorest states. It is estimated that if Bihar were a country in Africa, it would be the third most populous and second poorest by per capita GDP. Mahinder has three children and a wife, who live in a village in Begusarai, Bihar. He sends about 3000 rupees every month to support their household expenses and fees. The neighbor kiosk or the ‘kirana’ store is his immediate point of contact for all needs, including grocery, cigarettes, connectivity and financial services.

The neighborhood kiosk is a crucial anchor in the Indian social context. Not only is it a form of local “grapevine” – a center for sharing news and gossip, it is also the most readily available center to run daily chores. Unlike big chain and formal retail found in malls, informal and decentralized retail has the deepest penetration and distribution in India. Unsurprisingly, it is common to find the most familiar brands of fast-moving consumer goods at a small kiosk in rural India.

(Photo by Amrit Pal)
Digital financial services are taking advantage of informal retail to provide an array of financial services in areas that were traditionally out-of-reach. Remittance services are of critical importance to millions of migrants like Mahinder, who support their families thousands of miles away every month, and in emergencies. 

Mahinder came to know about the service, ‘Eko’, through the shopkeeper at the kiosk. Buying soap and bread has evolved into a long-lasting relationship, and it is easy to confuse Mahinder and the shopkeeper as long-lost friends. Mahinder would often ask the shopkeeper for credit, while purchasing a cigarette and came across the brightly colored signs with ‘Eko’ splashed all over the shop. You could send money instantly using a cellphone, and it would arrive within hours. "It was like magic”, says Mahinder, when he first used the service in 2012. It was easy to send and you could trust that the money will actually show up for your family in Bihar.

Eko, a remittance provider, in a departmental store in Bhiwandi, India.
(Photo by Amrit Pal)

(Photo by Amrit Pal)
When asked about which provider he trusts the most, he said, “all banks are like Eko and I don’t care as long as the money reaches my bank account”. Trust is a critical factor in financial services, and the earliest service provider often exhibits ’the Xerox effect’ where the brand itself becomes the activity. Similarly, even though the customer has a choice to pick from several competing products, the brand association is highly singular.
Over the last few months, the same kiosk is choke full of posters advertising dozens of remitters, with new names like Oxigen and Suvidhaa, and also big brands like Western Union.
While such hyper-competition is great for customers, there are adverse affects on transparency and cost to customers. Most customers in the Bhiwandi area have limited education, and are unable to differentiate whether they are actually using the service they want to use. Additionally, as service providers compete for market share and razor-thin margins, kiosk owners have the incentive to prioritize their commissions over customer benefits.

A shop with banners placed by remittance providers. (Photo by Amrit Pal)
Traditionally, regulations in India have favored remittance-only providers, who are shunted off from providing a wider suite of services to their customers who may have broader financial lives. As a result, the financial lives of customers are ‘unbundled’. Additionally, a hyper-competitive market environment may lead to service providers shutting shop, which harms the customer in the long-run.

Recently, the Reserve Bank of India issued regulations to license ‘payment banks’, aimed at providing a liberal framework for new-age, digital financial service providers who can provide vertical and horizontal offerings to their customers. 

This blog post provides a glimpse of the progress in infrastructure and interfaces for remitters in India. In less than a decade, tremendous strides have been made to provide low-cost, reliable and ubiquitous channels for the poor to access remittance services. User behaviour and expectations will evolve simultaneously. For a deeper study in user behaviour and supporting structure read Amrit Pal's final report, One Among Many? Examining the Efficacy of Mobile Money in India's Remittance Corridors.

Monday, February 1, 2016

Mobile Money Uptake, Savings and Social Networks in Tanzania: A Lesson in Methods

When we decided to work on mobile savings in Tanzania, we had an initial understanding of the value of formal savings from the economics literature. We knew that savings accounts — from banks or mobile money operators — were becoming increasingly common in many unbanked areas of the world, and that adopters derived some important benefits from their accounts (Dupas and Robinson 2013; Prina 2015). What was less clear, and became the focus of our work, was the extent to which savings accounts generate social benefits (or costs). In particular, we became interested in measuring the extent to which savings accounts generate “network spillovers”— that is, impose benefits or costs on the adopters’ social network. The questions we posed to ourselves were: Do savings spillovers exist? Are they positive? Negative? Or both? Who gains and who loses? Finally, does savings generated through mobile money accounts lead to such spillovers? 

EZYPesa stand in Zanzibar Town
We have several reasons to believe that spillovers from savings exist and have important policy implications. Conceptually, positive spillovers may arise because savings access appears to raise the incomes of adopters, and a long line of economic research indicates that income gains may be shared among social networks. Mobile money facilitates transfers, and therefore could also facilitate this type of spillover. The case for negative spillovers is more nuanced, but also plausible. Existing economic theory indicates that savings could encourage “shielding” cash from social networks. In practice, we have evidence from sub-Saharan Africa that households appear to attempt to avoid “kin taxes,” (see Baland et al. 2011; Dupas and Robinson 2013; Jakiela and Ozier 2012) and savings accounts may play a role in this avoidance. Given this premise, we hypothesize that different members of a social network may experience different effects. “Altruistic” ties (those characterized by “I want to share”) may experience positive benefits while “obligatory” ties (characterized by “I have to share” may experience negative effects). If obligatory ties tend to be poorer to start with, inequality may widen and, in turn, inequality may aggravate negative effects through a vicious cycle. 
Once we decided on the hypothesis, we set on creating a randomized control trial that would allow us to generate, measure and ultimately study these spillover effects. At the time of writing this blog, we have completed all aspects of the trial and are working on the analysis. 

Our intervention: Zantel’s EZY-Pesa in Tanzania

In our research, we distributed mobile savings accounts to approximately 1,500 participants in 33 rural and peri-urban areas of Zanzibar (Tanzania), and then studied the effects of adoption of these accounts on the adopters’ social networks through follow-up interviews. This work was done in partnership with Zantel, Zanzibar’s leading mobile phone operator whose mobile money product, called EZY-Pesa, allows deposits and withdrawals through local retailers. At the start of our study, this product was not widespread outside Zanzibar Town, and Zantel agreed to implement a marketing campaign tied to the study.

Scheme of Intervention
Our work began in September of 2013. Our research partners in Tanzania advertised a community meeting where a study tied to savings accounts was carried out. We then surveyed those individuals who showed up to the meeting and had expressed interest in opening a mobile money account. We collected baseline data on their income, occupation, and other socioeconomic markers. In addition, we collected information about their “key network partners”: financial partners, friends, advice-givers, etc. The key partners were ranked by respondent on the basis of questions such as “Imagine you got a surprise payment of Tsh 100,000 (~$65). Who would you most want to keep this secret from? Who least?” This way, we were able to identify other people in the community who were likely to be either an “altruistic” tie, or an “obligatory” tie.

Following the interviews, we coordinated a mass marketing campaign with Zantel in October through December 2013. We randomly assigned some of our baseline respondents (“focal respondents”) to receive help signing up for EZY-Pesa. The marketing visit included a one-on-one explanation on how to operate EZY-Pesa to accumulate savings. Importantly, marketers were not allowed to talk about the transfer features of EZY-Pesa. Finally, to encourage usage, we also made a Tsh 2000 (~$1.25) initial deposit in their new EZY-Pesa accounts. The remaining households were randomly assigned to receive Tsh 2000 in cash, no marketing visit, and no sign-up assistance. 

In summer 2014, we identified baseline respondents (“focal households”) plus one tie we deemed to be “altruistic” and one tie we deemed to be “obligatory”. Ultimately, we were able to gather information from a large number of participants—over 1,500 focal individuals and 2,500 of their social ties. In this endline survey we collected information on demographics, informal transfers, and demand for savings. Respondents were also asked whether they received a marketing visit in October through November from Zantel, and whether they opened a mobile account. We used the answers to these two questions to determine how well the marketing intervention went. 

Stumbling blocks on the road to analysis  

Marketers were instructed to enroll in EZY-Pesa only those focal individuals who were randomly assigned to the treatment. Unfortunately, the marketing visits were not targeted as agreed, complicating our efforts to study their causal impacts. We found that only one quarter of treatment individuals reported being visited by Zantel representatives; moreover, one fifth of focal individuals assigned to the control reported receiving a visit. (A much smaller fraction, 13%, of ties reported a visit from marketers). Since there is not much difference in the likelihood that a focal person received a marketing visit, we could not use standard methods of analysis for experiments. 

Despite this setback, we find that the marketing visits were effective at signing up new users: 40% of visited treatment individuals opened an account. This is higher than take-up rates of microfinance (e.g. Banerjee et al. 2015). Of those who signed up, 52% used the account “actively” (two or more times), a figure similar to findings for traditional savings accounts in Kenya (Dupas and Robinson 2013).

Fraction of respondents who opened a mobile savings account    
Fortunately, a much smaller proportion of visited control individuals (24%) and of visited ties (19%) opened a savings account. We interpret this to mean that many Zantel marketers indeed declined to sign up those not formally assigned to the treatment. Because of this, we do observe a statistically significant (albeit small—only 5%) difference between the fraction of all treatment individuals opening an account and the rest of our respondents. 

The road ahead

Just because marketers did not follow the instructions provided does not mean we cannot uncover the spillover effects. By pairing each focal individual who received a marketing visit with another focal individual who was skipped by the marketers but has very similar characteristics, we can use “matching” techniques to study both positive and negative spillovers on the paired ties. 

While we now working through this analysis having derived certain lessons from our intervention. First, (mobile) savings are not for everyone: of a group that expressed interest in EZY-Pesa, 40% of those who received a marketing visit signed up for an account and among these only half of those who signed up used the account actively. While there is an active discussion on the importance of reducing fees and entry costs, our study suggests that reducing those costs to zero is not enough. Costs are not the only (or perhaps even the main!) barrier to adoption.

Second, we think that our partnership with Zantel had an important benefit: having done almost 700 marketing visits was certainly a big accomplishment, and it increased “external validity” (and hence the scalability of the intervention). On the other hand, the scale did come at a cost: there was noncompliance in the way marketers approached local communities, and this reduces the study’s “internal validity” (i.e. ability to estimate causal impacts without additional assumptions). It will be interesting to see if future studies will emerge that can address the latter. 

Works Cited

Baland, J.M. ,  Guirkinger C., and  Mali, C. (2011). Pretending to Be Poor: Borrowing to Escape Forced Solidarity in Cameroon, Economic Development and Cultural Change, 60(1), 1 - 16.

Banerjee, A. V., E. Duflo, R. Glennerster, and C. Kinnan (2015). The miracle of microfinance? Evidence from a randomized evaluation. American Economic Journal: Applied Economics 7(1): 22-53.
Dupas, P. and J. Robinson (2013). Savings constraints and microenterprise development: Evidence from a field experiment in Kenya. American Economic Journal: Applied Economics 5(1), 163–92.

Jakiela, P. and Ozier, O. (2015) Does Africa Need a Rotten Kin Theorem?  Experimental Evidence from Village Economies. Review of Economic Studies.

Prina, S. (2015) Banking the Poor via Savings Accounts: Evidence from a Field Experiment. Journal of Development Economics, 115: 16-31.