Telling Financial Stories through Photovoice

“Trust is a difficult thing to earn and build, but our pilot program taught us that the social process of sharing photos and stories is a powerful place to start.”

—The UCI photovoice research team 

Community Credit is a collaborative research project at UC Irvine that seeks to connect minoritized and financially underserved communities with credit unions for the purpose of building trust and developing more equitable financial products that address the specific needs of the community. The project is funded by the National Science Foundation Convergence Accelerator program. The UCI photovoice research team included Melissa Wrapp, UCI anthropology Ph.D. ’21 and postdoctoral project manager; Ellen Garnett Kladky, anthropology graduate student; Bryan Truitt, visual studies graduate student; and Jenny Fan, Institute for Money, Technology, and Financial Inclusion manager. Photovoice is one method being used within this larger project, which also includes: listening sessions, ethnographic interviews, surveying, financial landscaping, decision modeling, deep data marketing analysis, and more. PhotovoiceWorldwide has been a vital partner to Community Credit, offering consulting, training, and facilitation throughout 2021-22. The following report, by Ellen Garnett Kladky, Ph.D. candidate, University of California, Irvine, details the team’s efforts. Original source: PhotovoiceWorldwide.

“Financial problems are often thought to be secret and shameful. Whether someone is facing big challenges such as bankruptcy or foreclosure, or is simply worrying about day-to-day concerns like paying bills, rising gas prices, or affording gifts for a child’s upcoming birthday, people often keep financial issues to themselves. As a result, many suffer alone. 

This year, UCI Community Credit researchers piloted a photovoice project that aimed to incorporate community perspectives in an effort to build financial alternatives that create inclusion, increase trust, and fight financial disinformation. UCI embarked on this project seeking to better understand what people in minoritized communities needed from the financial institutions that serve them and how they assess the trustworthiness of institutions. But, in a larger sense, our team hoped that the photovoice project would serve as a building block for community involvement, a way to empower participants to craft narratives about their financial strengths and weaknesses, articulate their financial needs, and re-imagine the financial future for themselves and their community.

Pictured: Photos on the theme of uncertainty and resilience

The photovoice pilot consisted of eight participant-researchers recruited by local community-based organizations (CBOs) that work with financially underserved communities in Southern California. Participants took photos in response to a variety of questions (some of which were generated by the group) covering topics such as financial strengths, trust, coping with financial adversity, and creating financial stability. In our meetings, we discussed each other’s photos, wrote captions, and identified themes, which included balance, sacrifice and creativity, and support networks. Meetings culminated in a public share-out session for participants’ friends and family, members of the research team, and CBOs.  

Half of the participants were primarily Khmer-speaking, while the other half communicated in English. To make conversation possible, we relied on two Khmer-English interpreters. We also shifted from plenary group discussions to language-specific breakout conversations throughout our sessions. The process of interpretation can be time-consuming and imperfect, and at times we worried that not being able to speak directly might make it difficult for participants to fully engage with each other. However, to our delight, participants found that this diversity made the experience all the more meaningful. As one put it, ‘I’m Latina—I’m not Cambodian. But during this experience we shared our personal lives and learned how we are all similar in a way, no matter what color we are, no matter what race, no matter where you live.’ 

Pictured: "No safety, no freedom, not happy.
Being in a home has limitations, the homeless look free."

The process of discussing finances was often difficult. More than once, participants became emotional when talking about their photos. Some felt trapped, others faced eviction, others worried for their children. But sharing struggles and strengths was also empowering. Participants frequently noted that they were used to keeping these topics to themselves, and they found it reassuring to learn that others faced many of the same challenges. As one explained, ‘Being in this space, I am happy to know that I am not alone financially struggling; we are in this together.’ Additionally, the process of taking photos in response to prompts, writing captions, and determining themes gave participants confidence in speaking up about financial topics, asking questions, and turning to others for help. 

Pictured: "My children are my sources of hope and resiliency. Saving is not for me, but for my children. In my home country, raising a pig was a way to ensure a future source of income. But here, the pig is savings. I teach my children to save every penny, so it will add up and help us in the future."

This pilot program was insightful for our research team and our credit union partners as we work to develop methodologies for building trust within financial services. First and foremost, it brought into focus the fact that financial decision making and trust building don’t happen in a vacuum—they are completely entangled with other aspects of life. During our photovoice share-out meeting, one of the researchers on our team reflected, ‘This was a welcome reminder that while we sometimes like to separate out finance as its own domain, really it’s not separable from our relationships with our family, our religious lives, our cultural identities, and any number of other things.’

Many interventions aim to promote financial inclusion by focusing only on the domain of the financial, for example by offering new products or teaching financial literacy. But our photovoice pilot program revealed that to understand someone’s financial needs, and certainly to build trust in an institution, it is crucial to consider seemingly ‘non-financial’ aspects of their lives.   

"To understand someone’s financial needs, and certainly to build trust in an institution, it is crucial to consider seemingly 'non-financial' aspects of their lives."

Ultimately, we plan to use photovoice as a part of the Community Credit toolkit, a set of resources to help credit unions and financially underserved communities form long-term, collaborative relationships. As a part of the toolkit, photovoice will be the first step in member-driven product design. As one of our credit union partners observed, ‘Credit unions often want to be more inclusive, but they don’t know where to start, and the perspective of their members, or the people they are trying to include, is often missing.’

Photovoice has begun the process of bringing those perspectives to the table. Enabling community members to tell open-ended stories and build confidence in discussions of financial topics will bring to light financial needs (and strengths) that might not have been visible otherwise. But the role of photovoice in the Community Credit process is not simply one of information gathering or community empowerment: it will also begin to build trust between members of financially underserved communities and credit unions through listening and connecting. Trust is a difficult thing to earn and build, but our pilot program taught us that the social process of sharing photos and stories is a powerful place to start.”  

To see more photos from this project, check out #ProjectMonday features on Instagram:

• Can we speak about money
• Hearing the community

To learn more about the Community Credit project, visit https://sites.uci.edu/communitycredit/.

 

Rethinking saving: Indian ceremonial gifts as relational and reproductive saving

Article in the Journal of Cultural Economy by Isabelle Guérin, IRD-CESSMA, Paris, France; Govindan Venkatasubramanian & Santosh Kumar, French Institute of Pondicherry, Pondicherry, India

Dalit Marriage Ceremony from a peri-urban village.
Photo credit: Santosh Kumar

Abstract

Economic anthropology has long advocated a broader vision of savings than that proposed by economists. This article extends this redefinitional effort by examining ceremonial gifts in India and arguing that they are a specific form of savings. Rural households, including those at the bottom of the pyramid, do save, in the sense of storing, accumulating and circulating value. But this takes place via particular forms of mediation that allow savers to forge or maintain social and emotional relations, to keep control over value – what matters in people’s lives – and over spaces and their own future. We propose terming these practices relational and reproductive saving, insofar as their main objective is to sustain life across generations. By contrast, trying to encourage saving via bank mediation may dispossess populations of control over their wealth, their socialisation, their territories and their time. In an increasingly financialised world of evermore aggressive policies to push people into financial inclusion, the social, symbolic, cultural and political aspects of diverse forms of financial mediation deserve our full attention.

Notebook for a Tamil puberty ceremony, Manjal Neerattu Vizha.
Photo credit: Isabelle Guérin  

Access Journal of Cultural Economy:
https://www.tandfonline.com/doi/full/10.1080/17530350.2019.1583594

Access pre-print version (click top-right corner for download): https://hal-inalco.archives-ouvertes.fr/ird-02112848/

Read up on original IMTFI-funded research project:
https://www.imtfi.uci.edu/research/2015/govindan_guerin_2015.php#

Tools for Financial Literacy @ UCI

by Nandita Badami, doctoral candidate in Anthropology at UC Irvine

What do a fairy princess ball, a personal finance survey generator, and an online arcade game have in common? They are all tools that can be used to improve communication, learnings, and engagement with financial literacy.

This was only one of the many takeaways from the Tools for Financial Literacy, Empowerment and Justice convening held on June 28 at UCI’s Student Center. Hosted by the Institute for Money, Technology, and Financial Inclusion (IMTFI) and sponsored by Wells Fargo, the convening was a day of interactive workshops and talks that brought together practitioners from Orange County and LA County community organizations with experts in the fields of financial literacy research and pedagogy.

The day opened with welcoming remarks from Keith Kobata, Wells Fargo region bank president for Orange County, and Professor Bill Maurer, IMTFI Director and Dean of the School of Social Sciences at UCI. Prof. Maurer discussed the importance of acknowledging that many in the room had several years of engagement in the field of financial literacy (as directors or implementers of their institution’s programs), but relatively few had received formal financial literacy training in the course of their own education. Financial literacy is only just getting recognized in school and college curricula, and is a long way from being mainstreamed. The purpose of the convening, Maurer reiterated, was to “connect as a community, refresh perspectives, and to share resources towards a common goal.”

Organizations in attendance. Photo credit: Katie Sauer, Twitter

Resource sharing guided activities for the rest of the day: three invited expert organizations – Brain Arts Productions, the National Endowment for Financial Education (NEFE), and Next Gen Personal Finance (NGPF) – shared very different methods and approaches to engage learning.

Brain Arts Productions specializes in building financial literacy through the creative arts. Gwen Tulin and Liz Lark-Riley began the day with an interactive activity that got all the participants on their feet, working through difference between barter and trade through a card game, and demonstrating a teaching technique called Learning by Doing. Each participant received a packet of four to six cards, and a number (taped to a scroll on the bottom of their chairs!). The objective of the game was to get four cards that matched the number on their scroll, but participants could only do so by a 1-to-1 barter system: they could only trade one card at a time with someone else. Participants had only 10 minutes replace all the cards they were dealt with to match their personal number. After they did, they yelled “Match!” The game then abruptly changed: the organizers told us we had all won the lottery, and everyone received new wildcards that could be traded for anything. In this new form of the game, trading became easier, and many more people were able to yell “Match!”

After the activity, Gwen and Liz led the group through a reflection exercise. The point of the game was to demonstrate the difference between barter and trade using money—in this case, the wildcard that could be traded for any other card—but also to have the group converse with one another so that they could come to the realization that the privileges in the game were unfairly distributed. Some people had more cards to begin with (6, not 4), and this made it easier for them to win the game. The takeaway was as much about the difference between barter and trade as it was about the politics of resource distribution.

Bartering activity led by Brain Arts Productions.

Following the first workshop, senior director Dr. Katie Sauer of the National Endowment of Financial Education (NEFE), gave participants an overview of the current state of the personal finance ecosystem. Dr. Sauer showed how various elements – small dose lesson plans (not part of a broader curriculum), articles and reference resources, calculators, tips and tricks, expert advice, coaching, fintech innovations – interact to make a financial literacy ecosystem. Speaking about the need to understand how the various elements interact in order to “rightsize” expectations from individual interventions, Dr. Sauer challenged the audience to go beyond thinking in terms of individual interventions, and consider instead how to deploy several elements of the ecosystem together. She then finished off her research presentation by sharing NEFE’s Financial Education Evaluation Toolkit, an online tool to create free personal finance test to evaluate current programming: https://toolkit.nefe.org/.

Dr. Sauer: "Even the highest quality, perfectly dosed and delivered influence will be mitigated by other elements with the ecosystem."

Personal Finance Ecosystem, National Endowment for Financial Education © 2019 

From an overview of the ecosystem, the participants were then transported to a specific element of it. Christian Sherrill from Next Gen Personal Finance (NGPF) took the participants through a tour of the contents of the NGPF website – a resource hub for financial literacy educators. The participants explored NGPF’s various resources – including an interactive library, a quiz games library, and a video library. They also spent time on the website’s arcades page playing NGPF’s specially designed video games that help “game out” real life situations. These situations included paying for college, managing credit, making it through the month on a tight budget, and even what it means to live life as an Uber driver! Our table went through the budgeting app SPENT. We were each given a scenario, playing as an unemployed American (of the 14 million that currently exist), with meagre savings of $1000. How were we going to make it through the month? Some of us made it, some of us didn’t—but playing through real-life situations allowed us to appreciate the stakes involved in good budgeting (try it here: http://playspent.org/html/).

Learning by playing, NGPF's Christian Sherrill. Check out their free online personal finance arcade games here: https://www.ngpf.org/arcade/.

Brain Arts’s second activity demonstrated a tool called Process Drama where volunteers were invited to attend and buy provisions for a fairy princess ball. The group needed to travel to the Goblin Market and make decisions about what and how much to buy together. In doing so, the group was able to arrive at ways to negotiate personal values and spending as a group. Although an obviously unrealistic scenario, as is point of process drama—role-playing builds worlds through which to explore financial situations in low stakes contexts. Alternate worlds allow individuals to who tend to be more conservative or worried about taking risks in real life to explore multiple possibilities in a risk-free environment. Topics covered through process drama can include the following: negotiating for a raise, buying a house for the first time, applying for student loans, learning how to invest, and opening a bank account. After the activity, participants brainstormed contexts in which elements of their existing programs could be conveyed through process drama activity.

At Goblin Market: Process Drama activity with Brain Arts Productions to learn and reflect upon unconventional pedagogical techniques for financial education.

Brainstorming ways to use process drama for existing programs.

In addition to these workshops, Linda Nguyen, Vice President of Corporate Philanthropy and Community Relations at Wells Fargo, led a roundtable discussion with community practitioners: Claudia Flores from Human Options, Mary Anne Foo of OCAPICA, Yanet Gonzalez from Templo Calvario CDC, and Steven Kim from Project Kinship. Together, they discussed the importance of financial education, its role in transitioning from survival to sustainability, and solving the problem of generational poverty. They also discussed the various challenges facing the financial literacy training community such as:

• how to integrate financial literacy into existing programs (for instance, parenting—how do you model financial literacy for kids?)
• how to assess the level of financial literacy of individuals to point them in the direction of appropriate programs (a finlit course, or more extensive knowledge and behavioral changes?)
• the challenge of integrating financial health and mental health, and serving critical populations like refugees or victims of domestic violence.

Related to the latter point was the importance of recognizing financial abuse as a kind of domestic abuse to begin with. Questions and answers after the roundtable touched upon an additional challenge: how to measure success. As one participant put it, perhaps there is no “magic ruler” to measure success; success in this field looks different depending on where you start out.

Roundtable of community practioners.

Steven Kim of Project Kinship unfurling a list of the 48,000 barriers to employment if you have a felony conviction.

Participants took away ideas they wanted to develop further and eventually implement in pilot programs or additions to their existing activities. It was great opportunity to take time out of the day-to-day grind, take a step back, and imagine new ways of connecting and learning. As Monica Sauceda, who teaches financial literacy and entrepreneurship to high school youth at Templo Calvario CDC put it, “This event was very important to me as I have looked up some of the resources provided at the event on my own but as a small non-profit we do not have a team of trained individuals to do extensive research nor are experts in teaching. We rely on events like these to be informed and network with like-minded people to bounce ideas off of to be able to better serve our community.”

Towards the very end of the day, Prof. Maurer announced avenues for further engagement, including opportunities for expertise sharing between the UCI team and the various participants. The day ended with a networking reception, and promises for next steps at a national scale!

To access additional open access online educational and research resources visit: https://sites.google.com/uci.edu/toolsforfinlit.


Photo credits: AntMedia UCI Student Center Event Services.

Continuing the conversation about “financial inclusions” in Latin America – onto Mexico

In IMTFI's PERSPECTIVES blog series, IMTFI’s International Board members and affiliated researchers take on the definition of financial inclusion. This series aims to foster an open dialogue on issues around money, technology, and financial inclusion for the world’s poor. Individual contributions reflect contributors' own reflections on recent events based on their research and areas of expertise. The topic of financial inclusion will conclude with a capstone white paper by IMTFI titled "Mobile Money: The First Decade."

By Magdalena Villareal, CIESAS Occidente, Maria Elisa Balen, Universidad Nacional de Colombia and Soléne Morvant-Roux, University of Geneva

"What I haven’t yet understood is what this business of financial inclusion is really about… and more importantly, is there anything new?"

This was the important question posed by Dr. Lourdes Angulo-Salazar at the end of the first day of the seminar, "Current Dilemmas Concerning Financial Inclusions," which took place in Guadalajara, Mexico on May 14 and 15, 2017. While it might seem to be a curious question to end with, there are two aspects of the ongoing dialogue during that day’s discussions that she captured with her intervention.

On the one hand, there continues to be a productive skepticism with regard to the explicit goals of financial inclusion and how these are informed by underlying objectives, whether in terms of governance, the favoring of particular financial industries - or both. Yet on the other hand, such doubts were also complicated through the variety of perspectives and case studies offered by presenters in the seminar.

Audience at the seminar. Photos by Saúl Justino Prieto Mendoza.

“Financial inclusion” seems to be on everyone’s lips these days, in different countries in Latin America and beyond. But it means different things. For one presenter, financial inclusion implied an unquestioned policy target akin to bancarization, one predominantly envisioned as a vehicle for positive “economic and social development.” For another, financial inclusion was the problematic reification of social hierarchies through interest rates. A third presenter inscribed financial inclusion within a genealogy of failed development remedies prescribed sometime after the microcredit crisis, wondering whether “financial inclusion” is merely another diversion from more pressing discussions we should have about the need for structural change in our economic systems. However, other presenters discussed the ongoing need for financial inclusion in the context of an explosion of alternative currency projects in Brazil, or concerns about deportation policies under the Trump administration in the US. Without a reliable way to send their savings home, Mexican migrants increasingly fear that deportation could entail the complete loss of their savings, not only through physical deportation, but also through restrictions on keeping accounts remaining in the US in their own names, irrespective of whether they are in Mexico or the US. Given the complexity of these dilemmas, what financial inclusion is (or should be) about is far from settled, as Lourdes’ concluding question reminded participants.

Such lively discussions generated a great atmosphere for the seminar, organized by CIESAS (Center for Advanced Research and Postgraduate Studies in Social Anthropology), IMTFI, and the University of Geneva, with the aim of launching a regional IMTFI satellite in Latin America.

Participants included members of policymaking bodies such as Carlos Alberto Moya, Regional coordinator for the Alliance for Financial Inclusion (AFI) and Nancy Esthela Conde from the Central Bank of Ecuador, as well as academic practitioners such as Mariana Carmona and Isabel Cruz from the Mexican Association of Social Sector Credit Unions (AMUCSS) in Mexico, and Leandro Morais from UNESP (Universidade Estadual Paulista) from Brazil. Alexandre Roig from the University of San Martín in Argentina, Solène Morvant from the University of Geneva, Maria Elisa Balen from the National University of Colombia, Ursula Dalinghaus from IMTFI, Clement Crucifix from the University of Louvain in Belgium, and Enrique García and Magdalena Villarreal from CIESAS in Mexico rounded out the panels and provided a range of interdisciplinary scholarly perspectives.

In what follows, we highlight three key issues discussed in the event. (Presentations can be watched in full on the CIESAS Occidente channel of YouTube.)

1) Discrepancies between visions of financial inclusion 

While bancarization (as a tool for promoting financial inclusion) is acknowledged as useful for the poorest segments of the population, the strategies identified for implementing financial services exhibit different patterns. Carlos Moya and the Alliance for Financial Inclusion are promoting financial inclusion as part of an international agenda that should be approached via national strategies that take into account industry perspectives. Moya insists that financial inclusion must be included in government policies, that regulatory frameworks should be put in place, and that monetary incentives could be offered to encourage proper operation of financial markets. “The challenges Latin American governments face vis-à-vis financial inclusion,” he says, “include promoting capillarity in financial services within rural sectors, adopting the concept of green finances, and eliminating the gender gap in the use of financial services.”

In the same vein, Nancy Esthela Conde, from the Central Bank of Ecuador spoke of her country’s efforts concerning digitalization and its effects. Ecuador has implemented a host of new financial services such as efectivo desde mi cellular (cash from my cell phone) as a means of payment and other monetary transactions. As of May 2017, more than 335,000 accounts had been opened through this digital money platform, and transactions totalled more than $8.4 million. She argued that government should continue promoting financial inclusion in addition to financial education and the protection of consumers’ rights. This includes constant improvement of security systems related to electronic financial services.

Leandro Morais also noted in his presentation the role of governments in the development of financial services. He highlighted how, in the case of organizations and services associated with the solidarity economy, different political views of successive Brazilian governments affect these processes in nonlinear ways.

Problematizing the notion of “a single financial industry and separate national spaces,” Isabel Cruz’s presentation concerning migrant workers in the US who are “sending money home” detailed calls for grassroots social banking. These efforts involve working closely with migrants to account for the specific contexts faced by this vulnerable population segment in multiple countries.

Presentations by Solène Morvant and Mariana Carmona, Maria Elisa Balen and Enrique García highlighted that beyond the usage of formal financial services–be they digital or not–populations in Mexico and Colombia continue to combine a plurality and diversity of monetary and financial practices. These are embedded in socio-cultural logics that do not obviously match the criteria for ‘modern’ financial practices. They find that instead of a narrowing of financial repertories, these new forms of financial inclusion extend them.

Enrique García and Clement Crucifix. Photo by Saúl Justino Prieto Mendoza 

While financial inclusion is presented as a neutral socio-economic policy, then, most participants agreed that it was important to inquire into the underlying social conflicts and not lose sight of how financial relations are social and are thus embedded in power asymmetries.

Alexandre Roig made such relations explicit in his closing talk about state practices in Argentina, where the State plays a key role in improving access to financial markets for the workers belonging to the so-called “sector popular”.

2) The digital vs. cash frontier 

One of the main issues traversing financial inclusion (or inclusions, as some of us would have it) is digitalization. Digitalization implies the deployment of specific infrastructures and a change in the cost of moving money around whose impact can be variable, as Maria Elisa Balen noted in her presentation. No less important, digitalization carries with it the idea of enhanced possibilities of intervention on account of the electronic traces that it produces. No wonder, then, that digitalization figured in presentations on subjects ranging from the practices of microcredit bureaus to geopolitical discussions.

Clément Crucifix reported on his ethnographic study of a credit bureau in a Mexican microfinance organization. He described how field staff spend most of their time looking at information gathered on borrowers displayed on screens instead of interacting with them in person. As a result, such information is subject to manipulation, sometimes in flagrant ways, by agents who are seeking to achieve their targets. At the same time, the credit information recorded in such platforms transforms subjectivities outside of the credit bureau. Thus, credit agents’ practice of seeking out ‘trustworthy’ people in the locales that they visit and asking them to refer them to others–sometimes even taking out loans for those others–engenders not only ‘financial creditworthiness’ as a new kind of capital, but also chains of influence that are used for electoral purposes. Digitalization therefore produces effects that extend well beyond the individual represented on the electronic platform.

Beyond the politics of digital accounting records, there is also the issue of money’s circulation in digital form. Ursula Dalinghaus talked about a new episode in the “war on cash” in the context of demonetization in India and the ongoing push to promote digital financial inclusion by eliminating cash. Drawing on differences in cash usage even in so-called developed markets in Europe, she noted how a preference for cash over digital money is not explained in terms of how ‘advanced’ or ‘developed’ an economy is. She highlighted how various factors influence cash-usage and preferences, such as past experiences of hyperinflation and economic change in Germany or household strategies in the informal economy in India, and whether or not people trust in the state or monetary institutions to guarantee the stability of value for the future. Beyond delineating arguments and available evidence in the digital vs. cash discussion, where a focus on money laundering and terrorist financing in relation to cash has become prominent, she called attention to the framing of the debate. Why is it that the coexistence of cash and digital money is now being framed as problematic and even coined in terms of a war between two sides? This question, just like the one concerning the "true implications” of financial inclusion, remains open. (Read Dalinghaus's white paper: Keeping Cash: Assessing the Arguments about Cash and Crime)

3) Re-politicizing research on financial inclusion and the future of the regional research center

One of the aims of the Latin American regional research center is to create a space for dialogue between academics and practitioners on different forms of money and financial inclusion and the social relationships that these entail. The seminar was successful in laying a foundation for this dialogue with a participative and engaged audience.

The audience included a representative from PROSPERA, the national program for social policy, which oversees conditional transfers for the lower income population and other financial inclusion initiatives. Members from Financiera Nacional de Desarrollo Agropecuario, Rural, Forestal y Pesquero, and DIF (Desarrollo Integral de la Familia in Jalisco, one of the main social policy departments of the state government), were also present. NGO representatives, students, and researchers also participated in the seminar.

Through the IMTFI satellite we hope to continue these endeavors. We are interested in developing cross-disciplinary dialogues where complex theoretical issues can be discussed interactively with diverse participants, from practice-oriented researchers, to policymakers, to scholars, among many others. Such dialogues might take the form of panel discussions and seminars, or joint publications and other forms of dissemination. We are particularly interested in developing and organizing collective research projects involving different countries and diverse sectors of the population.

Magdalena Villareal is an international board member of IMTFI and senior researcher and professor at the Mexican Center for Advanced Research and Postgraduate Studies in Social Anthropology (CIESAS Occidente). 

Maria Elisa Balen is an international board member of IMTFI and an affiliated researcher at the Universidad Nacional de Colombia. 

Soléne Morvant-Roux is an international board member of IMTFI and Assistant Professor at the University of Geneva.

Drama in the payments infrastructure and saturation in financial education: Discussing new avenues of research around financial inclusion in Colombia

In IMTFI's PERSPECTIVES blog series, IMTFI’s International Board members and affiliated researchers take on the definition of financial inclusion. This series aims to foster an open dialogue on issues around money, technology, and financial inclusion for the world’s poor. Individual contributions reflect contributors' own reflections on recent events based on their research and areas of expertise. The topic of financial inclusion will conclude with a capstone white paper by IMTFI titled "Mobile Money: The First Decade."

By Maria Elisa Balen, Universidad Nacional de Colombia and Edgar Benítez, Universidad ICESI 

We are reporting on the forum entitled “'Opening the Economy': Debates about Financial Inclusion - between Profitability and Over-indebtedness” that took place on May 4th at ICESI University in Cali (Colombia), and the workshop on the following day. These two events, bringing together perspectives from public policy, industry, and academia, sought to motivate new generations of researchers to study the promises, problems, and challenges surrounding financial inclusion developments (for the full program, click here). Yet they also became a lively space for discussion between the audience and panel participants. We want to highlight three sets of insights pertaining to the conference’s opening talks and subsequent panels, pertaining to the pluralization of the notion of financial inclusion, what is at stake in current changes in the payments infrastructure, and the important yet saturated field of financial education.

The pluralized notion of financial inclusions

Being financially included can have different interpretations, and the conference’s two opening talks would set the stage for the debate. Carlos Moya gave an overview of the programmatic strategies being followed by different countries across the region that are part of the Financial Inclusion Initiative for Latin America and the Caribbean (FILAC), which he coordinates. Throughout his presentation he stressed the positive impact of having formal access to credit, saving accounts, and insurance for poor communities; in this view, financial inclusion means inclusion into financial formality. Such a perspective was problematized by the second presenter, IMTFI fellow Magdalena Villareal from CIESAS in México. She pointed out not only how among communities ‘financial inclusions’ already take place through participation in different circuits and types of debt, but also that what is referred to as the formal financial system also entails different sorts of inclusion depending on the varied negotiation power of particular individuals and populations.    

The pluralized notion of financial inclusions, left in the air as an invitation, helps ask not only whether populations are being financially included, but what type of financial inclusion is taking place. The following panels would, in a way, pursue the specification of the financial inclusion taking place when discussing both developments in the country’s financial infrastructure—marked by the move towards digital payments—and the challenges of financial education in contexts where expensive yet highly available loansharks (known as paga-diarios or gota a gota) can constitute not only pervasive practices but possible interpretive frameworks to use as starting point for trainings and campaigns.

Drama in the payments infrastructure 

“You need to learn when to commit suicide.” That was the beginning of the answer given by Hernando Rubio, the charismatic CEO of Movilred, to a student in the audience asking what his so-far successful enterprise could do if/when Facebook starts offering electronic payments. “And then, like the phoenix, be reborn as something new,” he continued. Rubio has been one of the main supporters of Colombia’s recent financial inclusion law and the decree that introduces a new entity –Societies Specialized in Electronic Payments and Deposits—into the regulatory framework of Colombia’s financial system. For Rubio there is no doubt that digital payments are the future not only of cheaper transactions, but also of democratizing credit on the basis of cheaper and more effective ways of knowing customers thanks to the harnessing of electronic data.

 The other presenters on his panel on payment infrastructures had similar, though more tempered, views. Andrés Velásquez, from the financial cooperative Confiar, insisted on the importance of using different, complementary means to reach and interact with clients, including digital payments as well as chatting over coffee. But it was Ricardo Gómez, regional manager of Colombia’s Banco Agrario, who offered a contrastingly different perspective. Owner of the largest and most dispersed physical infrastructure throughout Colombia’s

territory, Banco Agrario’s high operational costs include the hiring of helicopters to move cash in and out of distant municipalities where the lack of telecommunications or even electrical infrastructure makes digital options unavailable. If digital is the future, then there is still a long way to go in order to avoid such populations being left behind.

Whether the time for more traditional financial entities to ‘commit suicide,’ as Rubio would say, is coming soon or not, a historical example came up concerning Banco Agrario itself that brought into relief the importance of alternative payment infrastructures. In the 1990’s, the large chain of drugstores called Drogas la Rebaja, owned by family members of the heads of Cali’s drug cartel, was included in what came to be known as the “(U.S. President) Clinton List.” Being on that list entailed sanctions, including exclusion from the payment networks of U.S.-based Visa and Mastercard. Drogas la Rebaja would turn into a cooperative run by its employees, yet continue to be part of the Clinton List. It was only through Banco Agrario that the largest drugstore chain in the country, with more than 4,000 employees, was able to have bank accounts to continue operating during the decade-long lag between the priorities of the U.S. war on drugs and those of the Colombian government. What this example brought home is that the configuration of payment infrastructures not only entails varied costs, but also can affect sovereignty.

In sum, if the move towards digital payments seems inevitable and large changes are already taking place in this regard, then the availability of alternative payment infrastructures seems key not only if one seeks to avoid deepening the exclusion of certain populations, but also considering the margin for maneuvering given by different payment infrastructures that are far from neutral or apolitical.

Dispersion and saturation in financial education

The panel on financial education had three different perspectives on the topic, though they shared a basic assumption: people need more financial education in Colombia. Nidia Garcia, head of the department of Financial and Economic Education at Banco de la República (Colombia´s central bank) did a presentation on the main points of the national strategy of economic and financial education (EEF). Based on healthy financial habits, responsible use of money, and financial capabilities, that strategy represents the first attempt at promoting a unified national framework for financial education. Because the EEF was launched just a month ago, it is too early to have an idea of its reception among institutions, banks, IMFs, and the like. This top-down process will be interesting since financial education is not a new topic among institutions in Colombia like Fundación WWB-Colombia and Fundación Paz y Bien, whose representatives constituted the rest of the panel.

Daniela Konietzko, the director of Fundación WWB-Colombia, a leading microfinance institution with a bank of its own, pointed to some difficulties that they have faced during the last years in their programs. Among them are two that represent an important challenge for any institution interested in promoting financial education. First, time-intensive educational programs have been the most effective ones in terms of developing financial capabilities, yet the fact that poor women have multiple social and economic responsibilities in their homes and micro-businesses makes it harder to develop these kinds of programs for them. Second, since financial education has become so popular among institutions, people have begun to feel that a saturation point has been reached.

That saturation was also emphasized by Alicia Meneses, who has helped to create and develop the educational model of Fundación Paz y Bien, a grassroots organization. In her view, “People don´t like going to workshops or taking classes; they are tired.” In order to avoid this situation, she and her workmates have developed community-based interventions as the key components of their financial education programs. Rather than emphasizing individual capacities and skills—as the former approaches did—Alicia believes that acquiring good financial habits is a collective process of learning-by-doing. In a similar fashion to the Grameen Bank model based on social capital and networks, Fundación Paz y Bien showed us that learning the habit of saving requires collective strategies (i.e. saving clubs) with common purposes.

In sum, what is identified as the continued need for financial education faces a crowded scenario, not only in terms of the multiple activities in which potential beneficiaries such as poor women are engaged, but also in terms of the varied and dispersed financial education initiatives they have been already exposed to, which adds up to a feeling of saturation.

In such a context, is changing financial practices a matter of systematizing the diverse financial education initiatives and evaluating their outcomes in order to move towards a more coordinated approach based on lessons learned, as the central bank seeks to do? Is it a matter of designing strategies that are carefully tailored to the life conditions and motivations of particular populations? Or is it, as the Movilred CEO emphasizes, mainly a matter of making credit cheaper and more available using digital technologies, so that customers on their own will see the benefit and choose the better option? Such were the questions left hanging in the air.

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This event was part of two longer term endeavors. On the one hand, this was the first in a series of forums that ICESI University is launching under the title “Opening the Economy,” which seek to foster academic reflection about the economy from viewpoints that are not limited to those of mainstream economists. On the other hand, it is part of the process of configuring the Latin American node of the international network of researchers that are part of IMTFI. In the upcoming months, we plan to launch an online platform in which researchers working on social studies of money and finance in Latin America can learn about each other’s work, interact, and pursue common research agendas.

Maria Elisa Balen is an international board member of IMTFI and an affiliated researcher at the Universidad Nacional de Colombia. Contact Maria Elisa at mebalenu@unal.edu.co; Edgar Benítez at ebenitez@icesi.edu.co

Can financial inclusion be synonymous with financial justice and equity?

In IMTFI's PERSPECTIVES blog series, IMTFI’s International Board members and affiliated researchers take on the definition of financial inclusion. This series aims to foster an open dialogue on issues around money, technology, and financial inclusion for the world’s poor. Individual contributions reflect contributors' own reflections on recent events based on their research and areas of expertise. The topic of financial inclusion will conclude with a capstone white paper by IMTFI titled "Mobile Money: The First Decade."

By Stephen C. Rea, IMTFI Assistant Researcher

“In theory, every theory is great, but in practice, not every theory works.”
– Marcel Kitissou, University of Albany

From April 21st to the 22nd, Cornell University’s Institute for African Development and the Cornell International Institute for Food, Agriculture and Development sponsored a symposium titled “Mobile Money, Financial Inclusion, and Development in Africa.” IMTFI researcher Ndunge Kiiti was one of the event’s organizers, and IMTFI was a co-sponsor. The symposium presented an opportunity for academics and development experts to come together and discuss the current state of mobile money in Africa, its effects on the continent’s financial development thus far, and some of the obstacles and tensions that have arisen around financial inclusion. It also afforded a reunion of sorts for a number of IMTFI-affiliated researchers. In this blog post, I will focus on their presentations and the concluding discussion, both of which produced some sobering critiques of financial inclusion as an agenda for international development.

Sibel Kusimba, Rahel Diro, Belete Temesgen
Social and Economic Impact of Mobile Technology panel

Social networks and mobile money in Kenya

I arrived on the 22nd just in time to catch IMTFI researcher Sibel Kusimba’s presentation, titled “Digital Fundraising and Mobile Finance in Kenya,” on the Social and Economic Impact of Mobile Technology panel. Kusimba’s research has time and again reaffirmed an important lesson that often gets lost in the hype about subscription rates and transaction volumes: Mobile money services are most successful when they complement preexisting networks of social obligation. M-Pesa, which has become the “gold standard” for mobile money in its first decade of existence, has succeeded in large part because it operates through a densely intertwined social infrastructure that predates its deployment. However, as Kusimba pointed out,

Kenyan social networks are also variable, with some more persistent over the long term than others. Age, gender, and kinship are all contributing factors to the warp and woof of these networks, as money circulates through matrilineal sibling ties and women often act as arbiters of distribution. But personality and charisma are also crucial elements, especially for becoming a node or “hub” in a social network. Kusimba noted that maintaining one’s status as a hub requires considerable “relational work,” which in turn opens up additional opportunities for more relational work. Moreover, different network ties are useful for different sorts of transactions (e.g. emergency loans vs. money transfer), and so individual nodes in a network are vehicles not only for payments, but also can become small lenders themselves. Kusimba’s research demonstrates how M-Shwari and M-Changa— microcredit and fundraising apps, respectively, that ride on M-Pesa’s rails—afford new means of articulating relational work. M-Changa, which makes it possible for fundraisers to monitor each other’s activities, complements relationships built on trust in these social networks, acting like what IMTFI Director Bill Maurer calls a “distributed ledger” that works in a similar manner to the fact-checking functions in blockchain currencies. (Maurer kicked off IAD's symposium earlier in the week with his talk, “The Problems of Cash and the Perils of Cashlessness: Researching Mobile Money and Payment Infrastructure after M-Pesa" interview can be found here.)

Mobile money uptake in Ghana – one size doesn't fit all

After lunch, an unofficial “IMTFI panel,” titled Mobile Money and Remittances—Lessons in and Beyond Africa, featured IMTFI researchers Vivian Afi Dzokoto and Ishita Ghosh as well as former IMTFI postdoctoral scholar Ivan Small discussing mobile money research in global context. Dzokoto’s presentation, “Mobile Money in Ghana: Past, Present and Future,” raised an important contrast to Kusimba’s research, and in so doing reiterated the reality of “one size doesn’t fit all” that has confounded mobile money service providers. Ghana shares many similarities with Kenya when it comes to GDP PPP, share of the population who are unbanked, and widespread access to mobile phones. However, development experts and mobile network operators alike have lamented mobile money’s relatively slow adoption in Ghana when compared to its East African counterpart. In her talk, Dzokoto highlighted several key differences between Ghana and Kenya that help to explain why mobile money has failed to scale as quickly as some would have hoped. First, differences in immigration patterns: Whereas migration from rural villages to cities and the remittance corridors that followed helped to propel M-Pesa’s adoption in Kenya, these trends did not and do not exist in Ghana to the same degree. Second, the regulatory environment: the Central Bank of Kenya’s early embrace of mobile money and willingness to work with Safaricom and brick-and-mortar banks to create an enabling environment was a fundamental condition of M-Pesa's possibility. Ghana is a good counterexample of what happens when banks see mobile money as competition instead of as an opportunity for collaboration with telcos. The Ghanaian public also has very little trust in mobile network operators, in part because of network outages and infrastructural shortcomings.

Dr. Vivian Dzokoto

Education and outreach have been lacking in Ghana, too, with very few of Dzokoto’s respondents reporting that they knew how to use mobile money or had any sense of why it might be useful for them to do so. Finally, there is the fact that Ghanaians love cash and see little reason to use mobile money when cash is an option. Building on research that she has been involved with for nearly a decade, Dzokoto explained that the cedi’s redenomination in 2007 ended up incentivizing the use of cash and disincentivizing adoption of mobile money; since Ghanaians no longer had to carry around large piles of cash for even basic transactions, one of mobile money’s potential advantages—i.e. a more secure, more convenient mode of value transfer—was essentially obviated. All of these factors have combined to make mobile money an “option of last resort” in Ghana, used primarily for emergencies and remittances rather than day-to-day transactions.


Remittance models in Southeast Asia

Ivan Small’s presentation, “Remittance Technology Models: African Innovations for Southeast Asia?”, considered how the lessons gained from mobile money services in Africa might inform their deployments in Southeast Asia, specifically in Laos and Vietnam. As noted above, remittances and remittance corridors have been instrumental in the adoption of mobile money in places like Kenya. Small argued that the focus on harnessing remittances for development illuminates a few interesting points. First, development discourses have shifted from seeing migration primarily as a negative (e.g. anxieties about “brain drain”) to seeing it as a positive. Moreover, development experts—especially those working in and around financial inclusion—have come to understand internal migration and domestic remittances as potentially more significant than international ones. At the same time, since the early 2000s, anti-money laundering and counter-financing of terrorism initiatives have brought greater regulatory and public attention to remittances, for better and for worse. If remittances are so important to the success or failure of mobile money, then it is imperative to understand the specific contours of remittance practices in a given environment. As Small pointed out, local cultural ecologies and monetary repertoires influence adoption of new services like mobile money and affect financial practices in often unexpected ways. Uptake depends not only on local savings and transfer behaviors, but also on trust in networks, both social and technical; for example, the relative instability and unavailability of electricity in Laos has proven to be a challenge for mobile money. Furthermore, material liquidity continues to be prevalent throughout Southeast Asia because of long histories of conflict and political instability.

Preference for in-person transactions by the urban poor in Uganda and India

In her talk, “Informal Loans and the Mobile Phone: Glimpses into the Coping Strategies of the Urban Poor in Uganda and India,” Ishita Ghosh compared research on lending practices and strategies in East Africa and on the Indian subcontinent. She raised a deceptively simple research question that has profound implications: when the option of using mobile money for securing loans exists, why aren’t people calling upon their distant social networks and instead are maintaining their proximate networks?

The answer, she argued, is because in both Uganda and India there are important symbolic significances entailed by in-person transactions that make them preferable alternatives. Social etiquette matters; asking for a loan through a mediating technology like a mobile phone is difficult for many people because it does not afford the same opportunities to perform self-effacement and gratitude as a face-to-face interaction. Thus, reducing transaction fees for mobile money transfers and making interest-free loans available ultimately do not matter if the underlying social norms that influence financial behavior go unaddressed.

Moving forward – Financial Inclusion or Financial Justice?

The symposium’s final panel, Perspectives, Potentials, and Promises—What Next?, was moderated by IMTFI researcher Ndunge Kiiti, and featured Willene Johnson, former U.S. Executive Director of the African Development Bank; Melita Sawyer from Tufts University’s Fletcher Leadership Program in Financial Inclusion; Lourdes Casanova, Director of the Emerging Markets Institute; and Edward Mabaya, Senior Research Associate in Cornell’s Charles H. Dyson School of Applied Economics and Management. In her opening remarks, Kiiti noted three potential threads to think about moving forward. First, research has made it clear that in order for mobile money to flourish, stakeholders such as telcos, banks, and regulators need to work together, and so figuring out how best to facilitate their alignment will be crucial. Second, when looking at new entrants into the mobile money space like Alibaba’s Alipay, are services like M-Pesa becoming "backwards" before they are even over? In other words, trying to replicate M-Pesa outside of Kenya and simply hoping for the best clearly isn’t working, so what best practices should mobile money providers adopt in order to remain innovative, not to mention effective? Third, we have learned over and over again just how important remittances are not only for mobile money, but more importantly to the financial practices of the unbanked, and so one practical step that must be taken is reducing the price of remitting money, both domestically and transnationally.

A general sense of dissatisfaction with the current direction of financial inclusion pervaded many of the audience’s questions for the panelists. Mabaya offered this pithy reminder for those excited by the promise of so-called “disruptive innovation”: “It’s easy to get carried away by the

technologies, but they’re only as useful as the problems they solve.” The main problems that the panelists and audience members identified were twofold. First, there is clearly a need to develop a framework that can facilitate strategic partnerships among businesses, governments, development agencies, and, of course, the financially excluded. But who is best equipped to take the lead? The consensus was that it depends upon the problem at the time, and that like mobile money, one solution will not work everywhere or for every situation. Everyone agreed, however, that governments need to be more involved in helping to bridge disputes among banks, mobile network operators, and fintech innovators. Government regulators in particular are in the unique position to demand that financial practices be unbundled from the big banks. But at the same time, none of these interest groups can try to dominate the others.

The second problem, which builds upon the first, was well articulated in a comment from the audience: What do banks, insurance companies, and mobile network operators all have in common? They have all been deemed “too big to fail,” and thus enjoy subsidization by governments and aid organizations that allow them access to the poor in the name of “inclusion.” What are the distributional consequences of this? If the point of financial inclusion is making financial services more available, accessible, and affordable for marginalized social groups, can we honestly say that this has been the outcome, or are we simply propping up old vulnerabilities and creating new ones in the process? As Kusimba raised in her talk and the panelists echoed in their remarks, what does finance mean for someone living on less than $2 per day? Can we assume that traditional ways of approaching finance informed by centuries of banking practices are appropriate or even desirable for the financially excluded?

A larger question that grows out of these critiques is whether or not financial inclusion, as presently articulated, can be synonymous with financial justice and equity. And if so, can mobile money contribute to improving financial justice, or will it only perpetuate the same inequalities that many hoped that it would help solve? Over the next few weeks, the IMTFI blog's PERSPECTIVES series will feature reports from a number of conferences where participants have grappled with these same questions.

Photo Credits: Ndunge Kiiti

Influence of Mobile Money on Control of Productive Resources among Women Micro Entrepreneurs Participating in Table Banking in Nakuru, Kenya

IMTFI Researchers Milcah Mulu-Mutuku and Castro Ngumbu Gichuki's Final Report is available now on the ways that mobile money technology is contributing to women micro entrepreneurs' business strategies and control over productive resources in Kenya.

Dissemination workshop with women micro entrepreneurs
 and mobile money service providers in Nakuru town, Kenya

Report abstract
With mobile money technology being adopted, financial inclusion especially with regard to women and less educated is becoming a reality. In Kenya the high rate of adoption of this technology has resulted in more mobile money accounts than bank accounts. In this study we sought to determine whether mobile money usage influences control of productive resources among women micro entrepreneurs participating in table banking. The Government of the Republic of Kenya has been encouraging female entrepreneurship as one strategy of propelling the nation to the status of a newly industrialized country able to offer comfortable life to her citizens. Success in entrepreneurship is linked to control of productive resources yet this is a gendered aspect that favors men in much of the developing world. It is therefore imperative to document how women control these resources in the business context. A mixed data collection approach was adopted comprising a questionnaire administered to 392 respondents, two object-centered focus group discussions, and in-depth interviews with ten respondents. Questionnaire data were analyzed using frequencies, percentages and correlation coefficient while the rest were analyzed qualitatively. 

Important findings related to gender, discretion and control of resources
Mobile money technology has enabled women micro-entrepreneurs to control productive resources and especially business money. Results indicate that use of mobile money services influenced control of resources, especially those services that are easily integrated into existing social and business arrangements. Further investigations revealed that mobile money services have provided discreet methods of keeping business financial transactions shielded from husbands’ interferences. Interestingly, there was low usage of micro-savings and micro-credit services for table banking activities. Consequently, mobile micro-credit services had no significant relationship with control of productive resources. Qualitative data indicated that men are joining ‘women-only’ groups and are contributing new ideas and perspectives leading to investments in areas that are not traditionally for women.

Read their full report here

Their blog post on object-centered focus group discussions as a methodology to generate conversations with women micro entrepreneurs about their mobile money practices can be accessed here