Intermediaries, Cash Economies, and Technological Change in Myanmar and India (Part Three)

By IMTFI Researchers and Elisa Oreglia | SOAS, University of London, UK and Janaki Srinivasan | IIIT, Bangalore, India

Is mobile money changing the way people carry out their financial transactions in rural markets in Myanmar and India? Our comparative qualitative research of an agricultural market town in northern Myanmar and of a fishing market in southern India showed the multitude of ways people move, borrow, and save money in these places, and the value that humans bring to transactions that could easily be made through ICTs yet continue to be done “the old way.” ICTs and specific applications such as mobile money bring a different type of value, and in this final post we reflect on what we learned about human and machine intermediation in financial areas.

First of all, the combination of various technologies and brokers, such as traders and auctioneers, in rural markets in Myanmar and India translates the global reality of finance, financial tools, international supply chains, and political economy into an actionable reality for local farmers and fishers. A key feature of human brokers is that they are flexible and responsive to the changing political economy of their countries in ways that are not always possible for technology by moving in the grey areas between official regulations and informal economies, and thus leveraging gaps or strictures in the official economy. This flexibility is the constant value that users get from using human brokers rather than ICTs, all other things being equal. Because humans can leverage their social knowledge in their roles as brokers, they are able to adjust to changes in a broader political economy as well as to the specific users who they are working with. Thus, they can offer temporal and spatial fixes as well as their expertise in ways that are attuned to the times and their users. Technologies, on the other hand, face constraints regarding the extent to which they can be flexible based on what is inscribed into them by their creators and by the regulatory regimes in which they operate. For example, the fact that mobile money makes financial transactions visible is a feature that is inscribed into both the hardware and software that power mobile money and into the regulatory framework that allows it to operate under certain conditions. ICTs can be used flexibly, but this flexibility has to be figured out by its users, and there are limits to how much flexibility a given technology affords along a particular dimension.

A second point that we want to highlight is how brokers are usually better equipped, financially and often socially, to appropriate ICTs and leverage them to strengthen their positions in the markets, sometimes undermining farmers and fishers and reducing them to mere recipients of their expertise, or even trapping them in relations from which they cannot escape. As both cause and consequence of their trade, brokers are able to inhabit different social worlds that their clients are often not able to successfully bridge: the sense of “feeling out of place” that makes opening a bank account a much bigger challenge than simply gathering the documents required to accomplish the task. Ethnicity, gender, religion, caste, and educational levels all contribute to making people feel out of place in certain situations and environments. This kind of expertise in navigating and bridging different social worlds is perhaps the hardest to delegate to ICTs. Whereas in principle social barriers to entry are lowered on the class-less and ethnicity-blind world of ICT-based services such as digital money, or Market Information Systems, in reality such experiences are highly mediated by the offline worlds that people belong to.

Thirdly, we suggest that the question of whether or not financial transactions can be mediated more efficiently or effectively by humans or technologies cannot be answered in the abstract without referring to the specific conditions of a specific place. We will note that, for example, the problem that ICT users might have with being tracked in their transactions is less of a concern where digital technologies are introduced together with system reforms that make the system less predatory. The axis of time/space is also amenable to technological rather than human mediation, once structural reforms change people’s material circumstances. The 2016 demonetization in India and the demonetizations that Myanmar experienced in its recent history have uniquely affected certain segments of the population for whom the state was and is an unreliable financial partner. Such actions reverberate through time, and rhetoric alone is insufficient for persuading the same people that the state is now concerned about their financial inclusion. Once again, the issue of time is at the forefront: the consequences of financial encounters, either between individuals or between individuals and institutions, extend through time, and the latest ones take place in the shadow of those that happened before, thus needing the appropriate historical and political background to be fully understood.

Finally, we want to stress how it is easier for existing social practices and networks to adapt to innovation than it is for them to be changed by it. This is not a novel finding, but it is often overlooked when talking about the potential for inclusiveness of digital technologies; they are, in fact, more empowering for those who are already in a position of power, and who can thus acquire them earlier and deploy them alongside their existing tools and networks. For instance, traders acquired mobile phones before fishers and farmers did, and were able to reconfigure their own networks to take advantage of them. Once again, if looked at purely from a transactional and financial perspective, fishers and farmers are perpetually catching up with the better-established traders. Using (or not using) ICTs and tools like digital money in their own way rather than according to the expectations of the government and of financial institutions is their own act of resistance to reclaim their own well-established practices.

Read their illustrated final report, "Intermediaries, Cash Economies, and Technological Change in Myanmar and India", drawings by Krish Raghav (krishcat.com).

The report examines the range of roles that (human and non-human) actors and material practices that are involved in conducting financial transactions have, showing the central role that historical legacies and politics play in explaining why both cash and financial intermediaries persist in the digital age.

Links to past blogposts: "Intermediaries, Cash Economies, and Technological Change in Myanmar and India (Part One) and (Part Two)."

My Smart Phone is a Love Trophy: On Boyfriend-Girlfriend Negotiations and the Tensions between Adults and Adolescent Girls in Digital Nigeria

By Jude Kenechi Onyima and Chinedu Francis Egbunike

Boyfriend wooing an adolescent girl with smart phone
at a bush path in Anambra Stateption

"….If you do not like him, why did you accept his friendship?’’ Chika’s friend asked her as they walked from school homeward. ‘‘I accepted because he bought me a Samsung smart phone," Chika replied.

Exchanges like the one above appeared in many of the stories we collected during our 12-month ethnographic research in Nigeria about the tensions between adults and adolescent girls regarding ownership and use of mobile phones. A majority of adults in our study agreed that feature phones (cheap phones meant for calls and text messaging) are appropriate for early adolescents, and that smart phones were acceptable for late adolescents, but with conditions. In contrast, a majority of girls felt that restricted access to mobile phones is an infringement on their autonomy and their quest to join the global community. Especially in Christian neighborhoods, adolescent girls have found allies in their boyfriends who provided girls with smart phones. This has connected adolescent girls, their boyfriends, and girls’ parents in an unexpected web of duplicity, interdependence and contradictions.

The intrigues that surround phone ownership and use by adolescent girls show how the mobile phone mediates how young people construct their identity, struggle for autonomy and their self-expression. It exemplifies how technology can create a new social culture. Smart phones, unlike feature phones, display symbolism which transcends economic or technological meaning. Apart from attracting prestige and the feeling of 'I have arrived,' they reveal emotional flows and connectedness.

As we observed in our study, boyfriends’ purchase of smart phones for their girlfriends consolidated boyfriend-girlfriend relationships in a unique way. As seen in Chika’s story above, a girls’ acceptance of a phone means acceptance of a relationship. By purchasing a smart phone, a boy extends his influence and control over a girl. In another example, Edna, a 16-year-old student, returned a Techno mobile phone to her boyfriend after six weeks when she heard that he purchased another phone for another girl. Similarly, Arinze insisted that Sandra must return the phone he bought for her when they broke off their friendship. Phone ownership among adolescent girls and their boyfriends therefore represents a new form of creating visibility, attachment and identity.

When Amaka, a 17-year-old caregiver, lost her phone, her worry was not about the phone but the strain that the loss would put on her relationship with her boyfriend Chidi, who could not afford to buy a new phone for her. For Amaka, accepting another guy’s gift of a phone entails shifting her allegiance away from Chidi. For boyfriends, providing a smart phone to a girl is a symbol of conquest over other potential intruders. A smart phone is a love trophy. Whose phone a girl accepts and also uses draws the boundary between those whose intimacy is desirable and those whose is not. The smart phone in the context of a boyfriend-girlfriend relationship is more than a technological innovation. Mobile phones acquire new meanings as they become embedded in relations of accountability, reciprocity and secrecy.

Adolescent girls comparing phones at high school
graduation party in Enugu State, Nigeria

A smart phone in the hand of an adolescent girl signifies the autonomy, empowerment and strength of her opposite sex friendship. In our study, over 87 percent of adolescent girls were using smart phones they did not purchase but were given to them. Most girls do not enjoy using feature phones and usually turn down men who could not acquire smart phones for them. Mobile phones could be given as birthday gifts, graduation gifts, lovers’ day gifts, appreciation gifts and gifts brought back from long distance trips. In contrast, feature phones and old phones do not evoke the same symbolism with regard to the quality of opposite sex friendship. Ninety-nine percent of phones bought from abroad were smart phones and they are highly symbolic. They show where a girls’ attachment lies and where her affection flows ‘’…I cannot put my phone in a bag except where I am not proud of it.” Mercy, a 16-year-old apprentice replied during one of our interviews:

 “…As you know, we girls compare a lot when we meet one other. In the past, we discretely compared shoes, jewelry, hairstyles and handbags. Today, it is our mobile phone. I flaunt it [the phone] to intimidate other girls and make my boyfriend proud….”.

Surprisingly, girls are not much interested in how the money is raised for acquiring the phone, or what lengths boyfriends go to in order to give phones to their girlfriends. Obinna, a 17-year-old student could not sit for his Senior School Certificate Examination because he used the money for his examination fee to buy a smart phone for his girlfriend who, incidentally, was his classmate. “…I did not want to lose her love to other men….” Obinna pleaded, in response to his parents and school authority’s queries about what happened to the money. Boyfriends do not take lightly the privileges conferred on them by purchasing smart phones for their girlfriends. They always check up on how the girls are using their phones. Adaobi, a 17-year-old hawker, fought with her boyfriend over access to the phone, refusing to tell him the new password and denying him access to it. Just like the phone that was smashed during their fight, so, too, was their friendship broken: “…Someone who did not bring money to repair the phone he bought earlier does not have the right to question what I do with the phone. He lost his privileges when another man gave me money to repair it, ”Adaobi retorted, as she justified her behavior.

Smart phones purchased by boyfriends have therefore become instruments of accountability and availability, as Erin Kenny observed in her research with Tanzanian University students (2016). Boyfriends expect explanations of what their girls do with their mobile phone. “….Nothing worries my boyfriend like seeing ‘user busy’ when he calls me. He expects me to put all other calls on hold and answer him first. He also monitors how long I spend on calls and with whom…” a 17-year-old female university student in our study narrated during an interview. Buying smart phones for adolescent girls gives boyfriends a special place in the lives of their girls. It shifts accountability for a girl’s phone life away from her parents and on to her boyfriend. When Aisha Mammud, our female researcher asked 17-year-old Fatima how frequently her parent accesses her phone, her response was immediate: “…I will not let them touch my phone at all.” However Fatima allowed her boyfriend access to her password and he goes through her contacts and phone logs for monitoring purposes.

A veteran pharmacist in one of the communities we studied insisted that her daughter must finish high school before she could use a smart phone. She was shocked to discover that her daughter was already using a smart phone for over six months - bought for her by her boyfriend. Just like other girls in our study, the daughter left her phone with her friend and sometimes hid it in the house. I had a similar experience of shock the day that I gave one thousand Naira (about $3) in airtime to three students in a Christian neighborhood, thinking that it was only one of them who owned a mobile phone. One of the students privately unzipped a section of her clothing to reveal a phone hidden in her underwear, while another ran towards her friend’s bag to pick up her phone that she had been hiding there.

Eighty-five percent of adults we interviewed did not want adolescent girls to use smart phones without first meeting parents’ requirements that girls first graduate from high school or reach age 18. Adults believed that smart phone use could work against girls’ concentration and learning as well as give access to unsafe knowledge. "Phones connected online are dangerous in the hands of adolescent girls...," a 54-year-old mother of three burst out at one school debate. Most adults, especially in Christian neighborhoods, believed that smart phones could drive girls into uncharted life adventures, what Mizuko Ito and her research team refer to as, "geeking out" (page 28), and thereby diminishing adults’ control. As one community leader with three grandchildren explained to us:

“…Any mobile phone not purchased by a known relative should be confiscated or returned. Early ownership of smart phones offers unchecked autonomy to adolescent girls; this is malignant due to their age. It makes them gullible to treacherous habits. A number of high school girls have died seeking after the promises of people they met through the phone…”

Sadiq, who purchased a feature phone for her daughter in order to prevent her from accepting a smart phone from a boyfriend, discovered that her daughter willfully damaged the feature phone in order to make room for a smart phone. The daughter changed the casing on the new smart phone her boyfriend bought for her to an old one and lied that it was a spoilt old phone she got from the outgoing school principal. In another case, a 52-year-old female teacher who insisted that her daughter should return the smart phone bought by her daughter’s boyfriend discovered nine months later that said phone had been hidden by her daughter and not returned after all.

An adult querying an adolescent girl over the source 
of the smart phone she was caught using.

Our in-depth interviews with adolescent girls and adults provided justification for why most parents frown on boyfriends’ smart phone gifts. There are incessant phone-related misunderstandings, violence, and battering. Men tend to take their privileges to the extreme. Girls who out of naivety accepted the offer from a boyfriend did not find it easy to exit the relationship when they became uncomfortable. A 19-year-old school dropout told us that she was raped by the man who bought her smart phone: “…Men do not believe in a free lunch; any kindness they show is an investment of which no pleading can deter them from raping.” She continued, “Many of us who accepted guys because of phone reasons regret the act and wished we were smarter." Some men insist that their smart phone should be returned to them whenever the relationship collapses and such tensions have generated issues involving police and community leaders. “…He has slapped me for allowing another man to use the phone he bought for me. He had seized the smart phone from me many times and had uninstalled whatsapp services in it to avoid my interaction with other men,” Amaka, an 18-year-old fashion apprentice revealed to us. When we inquired why some girls accept smart phones from men knowing these potential consequences, Muna, a 17-year-old university student, shared her views:“…They accept because it is a ‘smart phone’. It gives them identity, smart phones is freedom and reputation. It shows that you have arrived. A smart phone is a girl's best friend - it cures loneliness.”

Finally, our study revealed that phone-related quarrels occur every 72 hours in homes where there are adolescent girls. Adults have reservations about adolescent girls’ use of smart phones. Many felt uncomfortable, threatened, even perplexed, while others are resigned to the fact of girls using smart phones. Adults shy away from the task of preparing adolescent girls for the responsibilities entailed in the digital revolution. Meanwhile, girls have not relented in a bid to outmaneuver adults and their roadblocks. Highly religious people feel more threatened by adolescent girls’ use of smart phones and as a result, create more roadblocks to uptake. However, Christian adolescent girls have more opportunities to acquire smart phones from boyfriends than do their Muslim counterparts. Yet tensions appear to be greater in Christian homes. Tensions are also higher among urban than among rural poor.

The digital revolution has indeed altered adults and adolescent girls’ social identities and created a new social space mediated by smart phones. This change is common in Christian-dominant Southern Nigeria. Our study shows that under these circumstances, adults who can play a “midwifery role” in ushering girls into the digital age could achieve better results in ‘redeeming adolescent girls’ from irresponsible use than those who play resistant roles in restricting girls’ smart phone use. The peculiar role of smart phones in boyfriend-girlfriend relations is still evolving. What has become clear for many of our study participants, is that a new culture of juggling identities in this social space is here to stay. But for those participants who are not comfortable with the identity the digital revolution has assigned them, there is still much room for negotiation.

Read Jude Kenechi Onyima and Chinedu Francis Egbunike's final report here
        
References
Kenny. E (2016) “Phones means lies”: Secrets, Sexuality and the Subjectivity of Mobile Phone in Tanzania.  Economic Anthropology 3: 254-265. http://onlinelibrary.wiley.com/doi/10.1002/sea2.12062/abstract

Ito. M, Horst. H, Butanti. M, Boyd.D, Herr-Stephenson. B, Lange.P, Pascoe. C and Robinson. L (2008) Living and Learning with new Media: Summary of Findings from Digital Youth Projects. The John. D and Catherine. T MacArthur Foundation Reports on Digital Media and Learning. (November) http://digitalyouth.ischool.berkeley.edu/files/report/digitalyouth-WhitePaper.pdf

Intermediaries, Cash Economies, and Technological Change in Myanmar and India (Part Two)

By IMTFI Researchers Janaki Srinivasan | IIIT, Bangalore, India and Elisa Oreglia | SOAS, University of London, UK

In our previous blog post, we described why we mapped how people borrow and send money around before and/or outside the formal financial sector. Our goal was to understand the value that intermediaries bring to financial transactions in Kerala (India) and Shan state (Myanmar). This led us to unearth a vibrant eco-system of intermediaries, who offer a variety of services and are often in competition with each other – a very different picture from the stereotypical idea that a lack of formal financial services is the same as a lack of financial services. The arrival of mobile money and mobile banking takes place in the context of an already crowded market of competitors. Clients have more choice – and digital financial service providers have to demonstrate their value relative to these existing ways of moving money.

The relatively newly established bank accounts for lower income sections of the population in Kerala are largely restricted to the depositing/transfer of money from the state under public schemes or subsidies. In Shan, state bank accounts are specifically targeted at people with some savings or traders. In both places, therefore, the introduction of mobile money services merely adds to the range of formal financial channels. People are aware of and are even beginning to use these channels, some to greater and others to lesser extents.

In Shan state, traders with a significant volume of business are opening multiple bank accounts to take advantage of free intra-bank money transfer, and thus be able to send money to clients for free regardless of where their clients have their bank account. Despite the digital banking applications, however, much of the work of signing up clients, helping them with deposits, transfers, and other operations still happened face-to-face. Banks would send their young marketing people around town to explain their services to potential clients, to tell them who else was already signed up and who was in the bank, thus allowing the client to establish a sort of trust by proxy: did they know the director of the branch? Any of the employees? Was any person they trusted already a client? This trust “check-list” was followed by regular, in-person visits to the bank even when the client did use mobile banking.

The increase of formal financial services has therefore resulted in an increase of formal financial intermediaries (regulators, banks, local telco operators in almost all cases) and the persistence of ‘old’ intermediaries, who still create value for their clients by moving around and lending cash.

Consequently, our second question in our fieldwork was about the different kinds of value that human intermediaries create. We have identified five such areas where the involvement of a human intermediary appears valuable enough to clients that they choose that route over using unmediated and/or digital modes of conducting financial transactions

1. Negotiating time
The intermediaries we identified were able to offer or move money at short notice, which was important in the largely agrarian communities we focused on. Economic transactions such as the sale of crops or fish are not always “cash-in-hand.” Very often, the markets for these commodities are far away (even international) and payments for goods sold are routinely delayed. Small-scale farmers seldom have the wherewithal to wait for payment. Therefore, they may decide to sell their goods to locally known traders for less than they could get if they sold directly to the final buyer, just so they receive immediate, cash payments. These decisions on when to sell, or who to sell to, are often made in the context of the farmer’s life at a given moment and their life phase – are there children to send to school? Is the farmer older and care more about receiving some cash now, than more cash at a later time? If a fisherman returns after a few days at sea and wants to buy himself a drink, he might care more about selling the fish quickly through his usual intermediary at a known market in order to get the cash he needs for that drink, rather than waiting to find the best price and market. (In the absence of a guarantee that digital money will be accepted, the need for physical cash is great. Cash is universally accepted, including at small- time liquor stores, a point that came up repeatedly in conversations with interlocutors at Kerala beach). What intermediaries offer their clients is thus an opportunity to negotiate how quickly they can access useable money.

2. Negotiating Space
Negotiating space is a second area where intermediaries add value. Intermediaries traverse geographical distances, going between villages and markets frequently – e.g. buying a crop from farmers or fish from fishermen, then selling at a market or to a factory, etc. For farmers, spending time going to markets (even with decent roads) represents a greater loss in income than the lower price they receive after a trader takes his/her cut.

3. Situated Expertise
Most of the informal intermediaries we met were themselves members of the communities where they transacted and had long years of experience in their work. This led to their status as local experts, who knew financial transactions and networks in their domain. In Kerala, fishers viewed their auctioneers as having experience with and deep knowledge of the local fish economy and the process of auctioning. They could be relied on to gauge the prices of different varieties of fish, their seasonal availability and demand across geographies. Similarly, in Shan state, traders are seen as experts in, for example, the national tea markets – as those in the know about which tea to send where. As local and export markets are increasingly intertwined, traders play an essential role in promoting, marketing, and establishing new markets for local produce.

4. Negotiating Visibility
Those involved in financial transactions are often concerned about the visibility of these transactions for a variety of economic, social, and legal reasons. Different formal and informal intermediaries are able to monitor the circulation of money to different extents. Importantly, the implications of their monitoring are also different. Money moved through formal and trackable channels, be they bank accounts or mobile money wallets, can potentially be monitored by the state and tied back to those involved in the transaction. In fact, in the Indian case, the Reserve Bank of India itself envisions digital money as a way to get a better and more reliable sense of the volume (and location) of financial transactions taking place in the country. However, medium to large-scale actors in a market often do not find being tracked by a telco or the state an attractive proposition.

On the other hand, smaller-time, informal intermediaries might not have the wherewithal (nor often the motivation) to track and document the transactions of those they transact with in as comprehensive a way (though they do ‘keep track’ of their borrowers). Moreover, sellers might be in a position to negotiate with intermediaries with whom they have a long-term relationship over how much they are being tracked, or what aspects of the seller’s transactions intermediaries are keeping track of. Thus, informal intermediaries (and cash transactions) keep actors much less legible to the state, which these actors might often find valuable.

5. Social fit
This is a tricky category that is as much about societal perceptions of fit. For example, in Shan state, Burmese-Chinese dominate the tea trade and many other agricultural commodities (especially those exported to China) because of language but also family networks. It then becomes difficult for non-Chinese tea farmers or traders without such extensive networks or skills to enter this market. But there are more subtle differences, such as gender (as other IMTFI researchers have pointed out) or educational level, that make people feel out of place in certain spaces. An intermediary, then, is the person who is able to bridge these divides, or who opens up access to some of these networks, because of their social location.

Studying intermediaries in the specific environment where they operate shows a rich variety in the roles they play and the value they create for their clients. Together, these can explain why clients might choose to go through human intermediaries rather than use their mobile phones directly to conduct many of their financial transactions. 

For Part One of this blog post series, see here.

To read more about their IMTFI funded research see their project page here.

Link to their one-day workshop this Friday, November 11th at IIIT-Bangalore featuring industry experts from Eko, Microsoft Research India, McKinsey Digital Labs, the Gates Foundation, India and the National Payments Corporation of India.

Stay tuned for Oreglia and Srinivasan's final report!

Intermediaries, Cash Economies, and Technological Change in Myanmar and India (Part One)

By IMTFI Researchers Janaki Srinivasan | IIIT, Bangalore, India and Elisa Oreglia | SOAS, University of London, UK

M-pesa, perhaps the best known and most successful mobile money service in the Global South, credits its success in large part to the widespread network of human agents that has facilitated wide adoption. But why do human agents continue to be important, when one has a mobile phone and could easily do without them? As the GSMA blog post that inspired our research puts it, “So here’s the puzzle: why do so many consumers … continue to rely on agents to make mobile money transactions… when sending money directly from an account registered in their own name is cheaper, faster and more convenient?” (Mann & Mutemi, GSMA’s Mobile Money for the Unbanked, 2015)

We set out to explore this question, starting from the viewpoint that if financial intermediaries persist, they must add some kind of value to the transactions they are involved with. What is this value, then? To uncover the value that human intermediaries bring to such encounters, we studied the roles they perform in financial transactions. We then analyzed which of these roles were amenable to being taken over by mobile money and phones, which ones were viewed as strictly linked to humans and why. 

To answer these questions, we conducted multi-country field research on financial transactions in Kerala, southwest India (Srinivasan) and in Shan state, northeast Myanmar (Oreglia). In Kerala, our focus was on fishers and in Shan state, on agricultural communities. In order to understand “who” moves money in these contexts, we took a step back and started from “how” money moves. Separating the “how” from the “who” turned out to be the first step in recognizing that intermediaries do not merely perform a function that can be accomplished instead with the use of technology. Rather, they create value for their customers in complex ways that a functional description such as “moving money from place x to place y” does not fully capture.  

Our fieldwork thus started by asking people how they sent around and borrowed money In both sites, we observed that there are a multitude of intermediaries available to farmers, small traders, shop keepers, and others who needed to perform financial transactions, both within and from/to other countries. A large proportion of these intermediaries did not operate through officially sanctioned or formalized institutions, working instead through more informal channels and networks. Overall, the complex web of such intermediaries we identified at the two sites included the following types:

1. Hundi, a system to transfer money (like hawala) that is based on informal networks of agents in different areas of a country - or even across borders - who transfer and lend money very quickly. In the Burmese context, these are often also traders, so they can move money around while also moving merchandise. While hundi is in fact a financial tool, in Myanmar people also referred to the agents themselves as hundi. 

2. Transport companies are used to transfer money for remittances or for commerce all over Myanmar. People give money directly to drivers, or to the bus company, which might then keep the money – acting rather like a clearinghouse with correspondents all over the country.  

3. Family and friends were used to move money around, and to borrow from, at both our sites. These transactions were governed by complex rules on whether / when to charge interest and how much. 

4. Traders, who are typically very mobile and have somewhat more liquidity than their average client, can transport (and loan) money easily. Such traders were present at both our sites. At the Kerala site, for example, many fishers would be loaned the money to purchase their fishing craft and equipment by medium and larger traders of fish  in return for the right to auction the fishers’ catch and a percentage of their fish sales on every trip.

5. Specialized money lenders (called ‘blades’ in Kerala) lend money at very high interest rates for short periods of time to clients (in this case, small-scale female fish vendors) who need an unpredictable amount of cash every day to purchase their produce (here, fish) because of wide fluctuations in the volume, quality and variety of the daily supply.

These ‘informal’ intermediaries take on great significance in light of how formal channels of finance function in the sites we studied. In Myanmar, they played a crucial role during the years of the military dictatorship (1962-2011), when the formal financial sector was limited to urban areas and to a very small segment of the population, and when the majority of people did not have other alternatives to move money around. In India, and especially Kerala, formal financial services, including international money transfer services, have been relatively more accessible for a large proportion of the population. Even here, however, fishing communities have been outliers.

By mapping out the existing solutions to move and borrow money outside formal financial services, we see that there are many services available even in places without banks and mobile money. In some cases, these intermediaries are in competition with each other, which keeps service charges down. For example, in Shan state there were so many different options to send money around the country that it was often a free service – as opposed to mobile money, which always charged a service fee. However, it is not only cost considerations that explain the persistence and reliance on these intermediaries, as we will discuss in our next blog post.

Read Part Two of this blogpost series.

*Building on this IMTFI-funded research, Srinivasan and Oreglia are hosting a one-day workshop this Friday, November 11th at IIIT-Bangalore. CLICK HERE to register and view the program, and join the research discussion with expert panelists from Eko, Microsoft Research India, McKinsey Digital Labs, the Gates Foundation, India and the National Payments Corporation of India.


1 While cooperatives and banks also offered loans to fishers in Kerala, the number of loans they could offer was far exceeded by the demand for loans in sites such as the one I studied.

Review Post: Monetary Practices of Traditional Rural Communities in Ethiopia: Implications for New Financial Technology Design

By IMTFI Postdoctoral Scholar Ursula Dalinghaus

In this blog post I review an exciting new publication by IMTFI Fellow Mesfin F. Woldmariam, co-written with Gheorghita Ghinea, Solomon Atnafu and Tor-Morten Groenli. The article is based on Woldmariam's IMTFI supported research and appears in the journal, Human-Computer Interaction. The post ends with a brief update on Woldmariam’s latest research endeavors, together with IMTFI fellow Ndunge Kiiti.

In their path-breaking and provocative research article, “Monetary Practices of Traditional Rural Communities in Ethiopia: Implications for New Financial Technology Design,” the authors propose novel design applications for digital money and mobile money information systems with illiterate and low-literacy users at the focal point. Grounded in a fieldwork-based case study on the money practices of several village communities in Ethiopia, and in the context of religious and social practices, the authors make a case for incorporating peoples' existing practices and values into the design of dematerialized money forms. The authors, like many in the financial inclusion space, anticipate a time when all money is digital and no longer needs to be "cashed out" of an e-money system.

What challenges does this present, not only now but also in the near future, for rural populations like the low-literacy communities studied in Ethiopia whose techniques for managing and embedding money in social practices depend upon the material aesthetics of money? Cash money features—such as color for sorting value and visible piles to budget amounts—are important for navigating the daily use of money and in fulfilling religious obligations and social performances. Especially in the context of extending money gifts, the materiality of cash enables individuals to decide when money amounts should be hidden or visible, and even to refuse a money gift based on its source or moral quality (is it "clean" or "dirty?")

Rather than assuming a "one-size-fits-all" approach, the authors argue that these values and practices should be integrated into the design of new mobile money platforms. Failure to take local and population-specific needs and values into account will mean that illiterate users will be further excluded or may even reject the adoption of new technologies. While the authors are careful to connect their design ideas to the specific case at hand, they argue that similar types of needs can be found in many other parts of the world. More grounded research is therefore needed to ask the right questions in developing locally specific and context-appropriate e-money applications that support existing social practices. The larger and crucially important question the authors of this article raise is this:

"who gets to decide what 'value to people' looks like, what 'legitimate uses' of money are?" (p. 511)

The insights and applications presented here will be invaluable for professionals and researchers alike in the financial inclusion space, as well as for anyone interested in the qualitative design implications represented by digital money futures. (The full article can be accessed here)

In a blog post for IMTFI Woldmariam wrote early on about the importance of metadata and information in conceptualizing how material money might be translated into digital form. His case study on cash management techniques in Ethiopian rural marketplaces has also been featured in IMTFI’s Consumer Finance Research Toolkit.

Mesfin Woldmariam talks with smallholder 
farmers from a DigitalGreen Project

More recently, Woldmariam has been collaborating with IMTFI Fellow Ndunge Kiiti on a project supported by the Institute for African Development at Cornell University to assess mobile money awareness and use/usage among smallholder farmers in rural Ethiopia. This project places research and on-the-ground dialogue with smallholder farmers and other stakeholders at the beginning and forefront of potential design and implementation of new technologies. Drawing on their respective field experiences and areas of expertise, Kiiti and Woldmariam's work emphasizes the importance of carefully assessing and documenting smallholders' existing practices and needs to develop appropriate and empowering solutions.     

To read more about Mesfin Woldmariam’s and Ndunge’s IMTFI research, their project pages can be found here and here.

References

Mesfin F. Woldmariam, Gheorghita Ghinea, Solomon Atnafu and Tor-Morten Groenli
"Monetary Practices of Traditional Rural Communities in Ethiopia: Implications for New Financial Technology Design." Human-Computer Interaction. Volume 31 (2016): 473-517

Hearthholds of Mobile Money in Western Kenya

New Article in Economic Anthropology by Sibel Kusimba, Yang Yang, and Nitesh Chawla

Cleophas Family
This sociogram is centered around Alice, a 73-year-old grandmother, and her cowives, Suzzanah,Diana, Rachel, and Zipporah (all in purple), who live approximately 20 kilometers south of Bungoma. Her deceased husband had several other wives. Alice’s children are in red, and her grandchildren (thin borders) are in green, orange, light blue, and yellow. Zipporah’s children are in light purple and blue. In-laws and friends are in white. (Fig 2, p. 270)

Article Abstract
"Kenyans use mobile money services to transfer money to friends and relatives via mobile phone text messaging. Kenya’s M-Pesa is one of the most successful examples of digital money for financial inclusion. This article uses social network analysis and ethnographic information to examine ties to and through women in 12 mobile money transfer networks of kin, drawn from field data collected in 2012, 2013, and 2014. The social networks are based on reciprocal and dense ties among siblings and parents, especially mothers. Men participate equally in social networks, but as brothers and mother’s brothers more often than as fathers. The matrilineal ties of mobile money circulate value within the hearthhold (Ekejiuba 2005) of women, their children, and others connected to them. Using remittances, families negotiate investments in household farming or work, education, and migration. Money sending supports the diverse economic strategies, flexible kinship ties, and mobility of hearthholds. Gifts of e-money are said to express a natural love and caring among mothers and siblings and are often private and personal. Consequently, the money circulations of the hearthhold avoid disrupting widely shared ideals of patrilineal solidarity and household autonomy."
Economic Anthropology 2016; 3: 266-279

The full article can be accessed here

Read more about Sibel Kusimba's IMTFI research here and here

To learn more about Sibel Kusimba's use of social network analysis as an ethnographic method, see her case study featured in the Consumer Finance Research Methods Toolkit, pp. 35-40, (Verbal Interviews)

Wealth without Currency: Social Money Usage in Rural Nigeria

By Onyima Jude Kenechi and Onugu Charles Uchenna

Girl child/ marriage in Umuchu

What is it like to live without currency in the 21st century? How could communities without legal tender and banking systems accumulate, store, and transfer wealth? Imagine possible mechanisms for managing wealth in a context where the social system is used in place of a financial system! That was our focus in this study. We explored the traditional non-cash modes of saving, storing, and transferring wealth in communities where social contracts have more prominence than cash. We analyzed the financial behaviors of people who live outside the conventional banking system, and how social contracts were used to manage wealth.

Social monies, as they are fondly called, are systems of shared obligations, rights, and relationships that entitle one party to perform an economic function for another. Values both economic and social are stored, saved, and transferred through social contracts, contributions, gifts, and donations to others which should be repaid in the future, probably through other means. Such social monies can be in the form of giving title, bride wealth exchange, contributions to ceremonies, giving of gifts during festivities, membership in clubs and groups, and land inheritance. As Sibel Kusimba (2013) and her team in their study on social networks and mobile money in Kenya observed, social relationships in rural African contexts are created through exchange of future values, debts, obligations, and a culture of entrustment in which future repayments are expected, especially during emergencies. Indeed, values worth millions of U.S dollars are exchanged daily in Africa using social monies despite the lack of formal currency.

Apprentices and their tutor in tailoring shop in
Amawbia, Anambra State

These non- cash modes of storing and transferring value are still popular because they have socio-cultural symbolism. Users are attached to them because they are convenient, relatively stable, and trustworthy. Since social monies usage is culturally ingrained, new financial innovations such as mobile money which makes remittances easier and faster ought to alter community dependence on them. In the light of this, we interviewed, observed and through listening to people’s stories sought to determine whether mobile money adoption in these communities could alter their social monies usage.

We sampled 512 women from 23 rural communities in Southeastern Nigeria who live on less than US$2 per day. Although 99% of them own mobile phones, only 3% of them have bank accounts. We interacted with these women and their community/cooperative society leaders as regards various traditional non-cash mechanisms of managing wealth and the possible effects of mobile money adoption on them. Interestingly, 7 popular non-cash modes of saving and transferring wealth were noted.

Banking with deities

Pictures of deities were not provided
because chief priests warned against it.
Even the diviners who sought the mind
of the gods said that the request for a
snapshot was turned down by the deities.

Deities are major sources of borrowing and saving wealth in the area we studied. The words of chief priests are sacrosanct in financial matters. They have helped to shape the financial behavior of adherents. Deities through their priests safeguard the valuables deposited at the shrine, and also lend money to borrowers. The awe and reverence the deities enjoy among their adherents makes it possible for them to perform some financial intermediation roles. This is similar to what Kenneth Omeje (2009) observed in his IMTFI-funded research, Borrowing from the Gods. These deities through their priests perform debt recovery functions, insurance, financial negotiation, factoring, verification of claims, advisory and guaranteeing services. In recent times, some priests have taken it upon themselves to scale their operations by imbibing some formal banking practices such as advertising and documentation.

Storing and transferring social and economic values simultaneously

Village shop and shopkeeper in Imezi-owa, Enugu State

Items that have only economic values can be conveniently stored and transferred in cash. However, items that have both social and economic values cannot be stored in cash; that is the relevance of social monies. They are the mechanisms for storing and transferring both economic and social values simultaneously, as seen in apprenticeship, marriage, and title taking. The following quotes address each of these issues:

Adanna, a 22 year-old apprentice, affirmed, “I do not have any money now, although I work. Since as an apprentice I would be settled with a new shop and a large sum of money in a few years to come, my toil for 4 years is not in vain. I have stored a fortune for myself.”

Ngozika, a 54 year-old mother of four noted, “No one here doubts the financial benefits of having a girl-child. My in-laws take care of my monthly upkeep and training of my two younger sons. My omugwo (post-natal visit) is fast approaching in two months time and I am sure my wardrobe will change. I pity women who do not have girl-children.”The following explanation from Mmasi, a 34 year-old single mother, was very insightful: “Emeka, the shopkeeper in the village square, is my bank. I keep the proceeds of my palm business every fortnight with him. This is how I grew the capital I used to buy assets. I trust him because he is reliable and his shop is big and well stocked……..Even if he uses my money, he can conveniently pay it back.”

“Our family’s three years of savings and income were put into my husband’s title taking,” Mama Nneka, a 46 year-old user of mobile money, commented. “It is an important achievement for the family. Apart from social relevance, it is a dependable residual income. He is paid to take part in ceremonies and in dispute resolution. His share of money is kept for him even in his absence by various community associations. The title will be transferred to my son when he dies. It has lifted us above poverty and lack.”The introduction of financial innovations like mobile money would not alter their usage. Instead, it would strengthen it. For example, the marriage relationship, although social in nature, has economic offshoots. As a result, economic terms alone cannot capture the essence.

Mobile money can only store and transfer economic values and as a result, communities will keep searching for mechanisms for storing and transferring both economic and social values. The major weakness of social monies is illiquidity and lack of general acceptability. They are not easily convertible to cash, and can only function where trust and prior relationship, exist. This understanding is critical for designing financial products, and it could assist operators in knowing what people in rural areas would use mobile money for, and what they would not use it for.

Click here to see their final report: Mobile Money, Social Capital, and Financial Behavior of Women’s Cooperatives in Rural Nigeria

References

Kusimba, S (2013) Social Networks and Mobile Money in Kenya.

Omeje. K (2009) Borrowing from the Gods

     

Social Relationships and Payments among Poor Ethiopians

Upturned umbrella, for collecting donations

We are happy to release our newest working paper, from IMTFI researcher Woldmariam F. Mesfin: Understanding Social Relationships and Payments among Poor Individuals in Ethiopia. From the abstract:

Previous studies concerned with mobile financial services for the poor have been narrowly conceived, mainly depending on secondary data and focusing on technical design issues without having fully understood the poor’s complex relationships and needs therein. In order to fill the current knowledge gap and inform mobile money system design, this study investigates social relationships and social payment practices among poor rural individuals in Ethiopia. Key findings regarding their money exchange practices are (1) executed secretly (undocumented) or disclosed (documented), (2) money gifts can be accepted or rejected based on amount, source and purpose of the gift, (3) monies may be given as personalized gifts, and finally (4) individuals separate their money based on purpose and source. A qualitative research approach with key informant focus group discussions served as the primary means of information gathering.

Click here to read it!