Global Sustainable Finance Conference 2012

IMTFI researcher Steve Seuser of the Public Banking Institute recently attended the Global Sustainable Finance Conference in Karlsruhe, Germany. He wrote the following report for the IMTFI blog:

In July 2012, the Global Sustainable Finance Conference took place in Karlsruhe, Germany.  Sponsored by the Etech Center for Applied Environmental Technologies, the conference explored the intersection of sustainability and finance following the economic crisis in 2009.  Approximately 70 attendees from around the world participated. The conference brochure is available online.

An electric Smart Car, on display at the conference

The two-day conference featured a series of interesting presentations on local to international themes such as responsible banking at Volksbank Karlsruhe and the impact of Rio + 20 on the Green Economy.  Readers not familiar with German banks might be interested to learn about Germany’s long history of public and cooperative banking serving the needs of local businesses and residents. The cooperative  Volksbank Karlsruhe, for example, was founded in 1858 now has 40,000 members, 430 employees, and 28 branches, with 2.2 billion euros in assets.  It serves primarily small and medium enterprises and individuals.  Collectively, cooperative banks in Germany have 727 billion euros in assets and serve 17 million members.

On the international side, many observers lamented the lack of outcomes at the Rio + 20 conference.  Presenter Peter Prokosch, Managing Director of the United Nations Environmental Programme, however highlighted a silver lining.  Measurability indicators for all three measures of sustainable development – environment, green economy, and social indicators -- will be incorporated into future plans.  Also highlighted in the final Rio + 20 document are Sustainable Tourism, extensive discussion of oceans and seas, and small island development.

Other sessions at the conference highlighted the following topics:

• Marketable carbon bond (see www.standards.climatebond.net)
• Helping the financial industry to drive needed changes to create low-carbon and climate-resilient economies
• Sri Lanka’s innovative DFCC Bank, which embed sustainability into in lending programs
• Forestry as a sustainable environmental and financial industry
• A proposed redesign of the international copyright system to increase adoption of new technologies (“Inter-Temporal-Bounty System”)
• Facets of the Financial Market Crisis presented by Germany’s central bank
• Greening the insurance sector in India, presented by a government regulator
• India’s YES Bank’s investments in sustainability, including both debt and equity capital, in areas such as water purification, telemedicine, and low-income housing
• Wind energy project finance in Greece
• The remodeling of a 1970s office building occupied by public/nonprofit bank Sparkasse Karlsruhe for energy efficiency

The final official event of the conference was a visit to the E-Mobility Center Karlsruhe (www.emobilitaetszentrum.de), a hub that showcases possibly the largest variety of electric vehicles and support ever assembled in one location.  American readers may be surprised to learn that GM markets the Chevy Volt in Europe under the Opel nameplate, with cars manufactured in the U.S.  At the other end of the auto spectrum is Daimler Benz’s tiny Smart, which is available at least in Europe in an all-electric version for 17,000 euros (about $21,250), with battery packs available for lease for 65-75 euros/month.  This pricing arrangement eliminates the high up-front purchase cost for electric vehicles, and spreads the battery costs out over their useable life span.

Other vehicles include all types of bicycles, scooters, small carts, delivery vehicles, and many other types of electric vehicles already available in the marketplace.  Karlruhe is establishing a network of public charging stations to enable residents to drive these vehicles throughout the city.  Plans are in development for a national network of charging stations.

Official presentations are expected to be made available shortly from the Etech website at http://www.etechgermany.com/en/main.html

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!

Haiti's mobile money at the British Museum

Money in the Haitian Marketplace, from the British Museum Money Gallery

This is guest post from IMTFI researcher Erin Taylor, on the new Citi Money Gallery exhibit at the British Museum.

Nestled between Andy Warhol's 'Nine Dollar Signs' and a Barbie cash register, Haiti's mobile money is making an appearance in the British Museum. Over the next few months, a collection of money-related objects such as phone cards, mobile handsets, Haitian currency and even underwear with a secret pocket will be on display in the Citi Money Gallery to show Haiti's recent transition to mass-accessible electronic payments alongside everyday accoutrements of popular financial practices. 

The Citi Money Gallery was officially opened on June 12 by Naveed Sultan, the CEO of Global Transaction Services at Citigroup, and Sir Mervyn King, the Governor of the Bank of England. Their participation was testimony to the significance of the newly-renovated exhibition under the curation of Dr. Catherine Eagleton. Featuring more than a thousand objects from the Museum’s extensive collections, the Citi Money Gallery looks at the history of the world through the lens of money, from 4500 years ago to the latest developments in digital technology. 

Haiti's mobile money fits into the exhibition as an example of the ways in which money practices are changing globally. What I found most interesting about this juxtaposition was how, when placed next to these far older money forms, mobile money didn't seem any more abstract or virtual than its far older counterparts. Whether we are talking about hand-engraving coins, signing bits of paper, marking tally sticks, fashioning shells or recording numbers on a computer, all money requires some kind of material form to register accounting. 

In the context of Haiti, this materiality matters in a number of ways. This became evident when we were collecting objects for the British Museum's display. It made us stop to think twice about what the materiality of mobile money might entail. In many ways, mobile money seems more like something people do than an actual product. 

The most obvious object to collect was the mobile handset itself. Clearly, to be able to use mobile money, Haitians must own mobile phones and the telecommunications structure with which to use them. Until just a few years ago, mobile telecommunications were a luxury for the majority of the population: even if one could afford a phone, there was often no signal tower within useful reach. Today, according to the GSMA Mobile Money Tracker, mobile penetration in Haiti is estimated at 10.79% percent, and far more people have access to a phone through family and friends.

Mobile money has more surprising ramifications beyond handsets and towers. Given that just 15% of Haitians have bank accounts (GSMA), security and storage are major issues in handling money in Haiti. Whether storing money at home, carrying one's own money around the city, or sending money between towns via bus or boat, Haitians develop measures to keep their cash safe. The pocket underwear in the display are often worn by women known as Madame Saras who run Haiti's informal market system. They wear them as they carry produce from the country to town markets, or when they travel to Port-au-Prince to buy non-perishable goods to sell back home. Also in the display is a money box with a secret compartment, one of many that is designed to hide money at home or deter spending. 

One of the more obscure, but interesting, items in the display is a metal cup that Madame Saras use for measuring out quantities of rice and beans for sale. We felt that these cups deserved a place in the display because they are such a stalwart of history throughout this small Caribbean nation. The anthropologist Sidney Mintz (1961) observed the use of these cups in Haiti's south back in the 1960s, and published a fascinating article explaining how vendors and customers haggle, altering both the quantity of goods for sale and the price simultaneously to come to a suitable deal. When trying to understand money culture, these things matter.

Funded by the Institute for Money, Technology and Financial Inclusion (IMTFI), our mobile money research is part of a broader project, Mobiles, Migrants and Money: Mobility in Haiti and the Dominican Republic. Along with Dr. Heather Horst and Dr. Espelencia Baptiste, we discovered that the new mobile money system, launched in November 2010, is changing the ways in which people handle cash. Haitians are not just adopting Digicel's TchoTcho Mobile and Voila's T-Cash to send money to relatives in other towns (traditional domestic remittances), but they are also using their accounts to store money for later use – what we call 'Me2Me' payments. The greater security of the storage medium makes money less visible and therefore more secure than cash. 

Money also requires our trust in the system: we would not accept these abstract tokens without having faith that we can readily exchange them for consumer items, or store them for a later date. The Citi Money Gallery exhibition provides much food for thought on the prevalence and means of fraud throughout the past few millennia. Issues of trust surrounding Haiti's mobile money have less to do with counterfeiting cash, falling more squarely on the question of whether people will trust the new system enough to use it. Will the money arrive? What am I being charged? And who is storing my money? 

The advantage of mobile money to overcome trust issues stems from the mobile handset itself. With plenty of experience topping up phone credit, customers already know that the system works. Furthermore, according to a report by InterMedia and backed up by our own research, Haitians tend to have a high level of trust in the telecommunications companies that run mobile money services. In fact, they trust them far more than they trust the national government, NGOs or even the Central Bank. Throughout history, the ability of fiat money to function as a unit of exchange is reinforced when that money is issued, or monitored, by trusted agencies such as kings, governments, or companies. 

There is, then, a great deal of continuity between old and new forms of money. The only major difference is the time it takes for the accounting to be done. Rather than waiting for a payment to arrive from ancient Persia, or sending cash from the Haitian-Dominican border via nine-hour boat ride, transfers of value can be made instantly. And if the movers and shakers in electronic finance have their way, in a few short years the materiality of money may be limited to the ledgers that are used to record accounts: that is, the computers and telecommunications infrastructure that comprise the basic platform of money today. 

References

Baptiste, Espelencia; H.A. Horst and E.B. Taylor. 2010. Haitian Monetary Ecologies and Repertoires: A Qualitative Snapshot of Money Transfer and Savings. Report for the Institute for Money, Technology and Financial Inclusion (IMTFI). http://cast.nacs.uci.edu/socsci/imtfi/baptiste_horst_taylor_report_haitian_monetary_ecologies_and_repertoires_112310.pdf 

Mintz, S. W. (1961). Standards of Value and Units of Measure in the Fond-des-Nègres Market Place, Haiti. Journal of the Royal Anthropological Institute, 91(1), 23-38.

Taylor, E.B., E. Baptiste and H.A. Horst. 2011. Mobile Banking in Haiti: Possibilities and Challenges. Institute for Money, Technology and Financial Inclusion, University of California Irvine. http://www.imtfi.uci.edu/files/imtfi/images/2011/haiti/taylor_baptiste_horst_haiti_mobile_money_042011.pdf 

IMTFI and Sicap Partner to Study Mobile Social Media and Mobile Payments in Indonesia

Makassar waterfront Photo courtesy of Tom Boellstorff

How might we better ensure that technology serves the needs of society? This basic question lies at the foundation of the research project “Landscaping Mobile Social Media and Mobile Payments in Indonesia.”

 Tom Boellstorff is Professor of Anthropology at the University of California, Irvine and the former Editor-in-Chief of American Anthropologist, the flagship journal of the American Anthropological Association.  Boellstorff announces a new IMTFI partnership with sicap and  Indonesian research teams on the sicap blog.
  

What kinds of needs for payment are not being met by existing systems? How are mobile phones and social media being used to meet those needs? What kinds of new needs, new behaviors, new beliefs about money and technology are being created?

To learn more, check out Boellstorff's inaugural blog post.

Modernity, Gender, and Informal Money Storage in the Philippines

Photo: Jae Estuar

We are pleased to announce our newest working paper, by Janet Arnado, "Hidden in a Coke Bottle: Modernity, Gender, and the Informal Storing of Money in Philippine Indigenous Communities":

In this paper I explore the relationship between modernity and gender
in a traditional society, using as a case the informal storing of
money among indigenous populations in the Philippines. I examine 1)
gender as the interface of tradition and modernity; 2) money as the
interface between tradition and modernity; and 3) money as the
interface between men and women. In particular, I look into the ways
modernity reshapes and reworks gender relations by looking at informal
money storage which provides evidence of rationality and individualism
that are characteristics of modernity; and also indications of
tradition such as the house as a site of storage, and relationships
and livestock as forms of money. In addition, this study examines
money storage as a social process whereby modernity and tradition are
inherently intertwined and gendered. Finally, I present gender as a
class and a site of bargaining observed in the ways men and women
store their money, where relations can be harmonious or antagonistic
inasmuch as men and women share or conceal money from each other to
protect their gendered interests in the family. 

This study contributes to the literature on the gendered interplay
between modernity and tradition. This exploration into the informal
money storage mechanisms of indigenous communities brings to the
surface two points. One, that their usage of monies in various forms
(livestock, webs of obligations, crops, and nationally issued
currencies) situates the in-betweeness of indigenous peoples in the
tradition-modernity continuum, and provides them with safety net when
economic and marital shocks occur. Two, risks associated with these
informal storing practices are defined and mitigated in gender and
cultural contexts, whereby women negotiate for discretion on the
allocation of household monies.

Reflections on Mobile Money

Jake Kendall, a program officer in the Financial Services for the Poor initiative at the Bill and Melinda Gates Foundation keeps his attention on innovations in financial inclusion.  

A year or two ago, had you polled the financial inclusion field and asked whether they thought that a person to person money transfer service (like M-PESA) would have a significant welfare benefit for poor households, on par with credit, savings or insurance, the majority would have said “no"....

If you asked the same question today, many whom I have spoken to would now say that improving the poor’s access to money transfer is impactful, and might even be as impactful as many of the existing savings, credit, and insurance options available from the microfinance sector.  (read the whole post).

He's thinking about how innovation happens, too:

Networks are powerful tools. In the past, the emergence of canals, railroads, electricity, telecommunications and the Internet provided new ways of moving people, goods, energy or information, with transformational effects on business models and the economy. One of the more powerful aspects of networks is that they often form platforms that catalyze interactions between parties that might never have come together otherwise, sometimes creating new markets in the process (read the whole post).

Kendall and his coauther conclude that 1) it is only a matter of time before many if not most poor households are using the platform to access financial services, and 2) that significant challenges remain to increasing the number and variety of services available over the mobile money platform, and in particular to connecting to the poor.

After all, as he puts it elsewhere, "Poor people’s need for domestic payments is often large, whether it is spurred by migrant labor remittances, informal support networks of friends and family, government welfare payments, or utility payments" (read the whole post). 

Recently, Kendall has been writing about new ways  to track financial access, using information about geographic distribution of bank branches, ATMs, CICO agents, and other financial access points relative to the spatial distribution of population.  The maps that they can make with this new method are really something (read the whole post).

Keep your eye on Kendall and associates to learn about new trends in the world of financial inclusion and check out this talk he gave on  payment behavior and innovative opportunities in Sub-Saharan Africa (watch the talk).