Liz Losh's Guest Blog: Who Do You Trust? Me or Your Lying Eyes?

The panel on "Mobile Money: Trust and Behavior Change" focused on how traditional credibility and economic credit might be still very related. Ironically, rather than emphasize trust, the video above from the Rural Bankers Association, which the first presenter Anatoly “Jing” Gusto of MICRA Philippines showed in his presentation, emphasizes convenience. The heroine "Nanita" who must keep house and operate two businesses no longer has to neglect her enterprises while she travels to and from the bank via jitney. However, Gusto and co-author Felicidad "Fely" Justiniana argue such rhetorical appeals from groups like the RBA and USAID's MABS that show the ease of text-a-payment practices may do little to influence potential clients to change their habits much when it comes to savings.

Perhaps the most memorable image in Gusto's presentation was a slide of the classic eighties video game Pac-Man. In Gusto's use of the game as an analogy for microfinance and mobile money, an RB borrower paying loans using mobil money must significantly navigate a maze filled with the ghosts that are barriers to financial inclusion. In this "struggle to make sense" of one's immediate economic circumstances, Gusto argued that the disenfranchised must look for their "power pellets," which were mobile technology services designed to help ambitious earners achieve better and more effective access to financial services.

Gusto tried to answer his central research question "Does mobile technology foster savings?" by examining his case study, Green Bank. His informants said that their funding from Green Bank represented the first formal bank loan for most of them. Nonetheless many of them still preferred hiding cash in their homes rather than saving in the abstracted terms of a financial institution. Furthermore, many claimed that they didn’t have the capacity to save and would prefer to use excess cash for their own businesses on the theory that that this financial strategy would ultimately bring in more income.

Mobile money was rarely used by such people, who still had a strong distrust of using the phone for m-banking. Thus, Gusto argued, mobile money had a weak effect on diversifying use of mobile money. As he put it, "technology is not enough," particularly if projects failed to address the human and organizational aspects of financial transactions or rectify problems with interoperability. The solution was assumed to be consumer education that acknowledges the importance of certain influences, such as family members, while also showing a path toward engaging in life and work spontaneously. In such campaigns, "the savings experience not the device should be the central focus."

Next, graduate student Mildred Makore from the University of KwaZulu Natal presented what she called an "additive model not transformative model" to characterize her work on "Exploring Use of Mobile Banking Services by the Poor: Case of Wizzit Bank in South Africa." Her case study of Wizzit Bank attempted to grapple with questions like "What is the actual usage of the mobile banking platform by the urban poor?" or "What purposes drive them?" After diving into a literature review of ICT poverty alleviation and development policies, Makore explained the work of "Wizz kids," who were unemployed university graduates hired to market the bank's services and sign up new clients in a "motivational exercise" centered on continuously going into same area and thus commiting the Wizz kids' labor in ways that could potentially go beyond sales.

In mapping the networks of the 500,000+ clients of the bank -- a group that included farm workers, security guards, miners, domestic workers, and factory workers -- Makore adopted a "capabilities approach" that focused the particular value that an individual might consider. (Of course, to gain one of the prized Wizzit cards one must meet the minimum requirement of identification.) She also explained how she narrowed down her research plan to areas with concentrations of Wizzit users in informal settlements in Alexandra, Orange Farm, and Kahlekong.

Finally Mani Arul Nandhi presented her study of how EKO functioned in India, a country in which 41% of the population was unbanked and 51% was financially underserved. Although urban poverty was over 25%. India had almost universal telecom access with one of the lowest cost retail distribution networks in the world. Nandhi's study of 160 customers and 13 agents may not have included the top executives to whom she hoped to have access, but "Impact of EKO's SimpliBank on the Saving Behaviour and Practices of Low Income Users: The Indian Experience" did present interviews with 20 EKO customers, 8 of whom had no bank account previously, to understand why it might be easy for such clients to save small amounts, particularly if they could avoid spending on nonessential (65%) or feel trust that EKO was a safe place to save (56%). Such services were considered particularly useful for reciprocal borrowing and savings and helped users "resist temptation" or "increase their resolve."

In the United States, social media campaigns affiliated with Occupy Wall Street have urged Americans to dump banks in favor of supposedly less rapacious credit union that were more averse to excess fees. Similarly, in Nandhi's Indian case study, financial transaction fees were also a strong source of deep customer dissatisfaction, particularly after September 2010 when those who depended on EKO services for basic financial services had to pay for both deposits and withdrawals. Furthermore, she argued, the market strategy of EKO seemed to be migrating from addressing the needs of the local unbanked to handling remittances from laborers abroad, which offered more lucrative commissions to financial agents.

As Julia Elyachar observed, all the papers adopted what she called a "user-centered approach" oriented toward the "beginning of a world that we now take for granted" and the "addition of new kinds of infrastructure" that was "person-centered" to enable an "increased repertoire" in which the user makes decisions in ways that acknowledge the importance of merchants and different actors. Such approaches center on "use not technology," as in the case of the conflicts over fees that Nandhi described.

Liz Losh's Guest Blog: Failed States, Shitting Grounds, and Ethnic Slurs

In the first panel on"Money Cultures: Identity, Wealth & Poverty" at the IMFTI annual conference researchers told stories about urban informal economies that might be at variance with the official narratives of international development, conventional charity, and even newer microfinance schemes.

The first presentation “Beyond the Failed State: Capital Mobilization, Investment and Entrepreneurship among Somali Refugees in Nairobi, Kenya" by Kenneth Omeje, who has presented at IMTFI before, and John Mwangi countered conventional tales of woe from the region about child soldiers and humanitarian catastrophes in which refugees from failed states never appear as economic actors and only take the stage as "poverty-stricken parasites" like those shown in this Google search for "Somali refugees" above. Instead Omeje argued that one could look beyond the one million "highly deprived" people in refugee camps suffering from the impacts of climate change as well as political instability to include the financial activities of 150,000-200,000 people in the densely populated suburb of Eastleigh, which is also known as “little Somalia” or "little Mogadishu" in the region, where shopping malls like the one pictured along side the Google search result screen present a very different picture of the Somali immigrant experience in Kenya. Omeje admitted that it was often difficult to study the underground economy, because it may involve piracy, trafficking in small arms or drugs, or other obviously illegal activity, but he also thought that the area was characterized by much more than its criminal element. (See this NPR story for more about these neighborhoods in which refugees and Kenyans of Somali origins co-exist.)

Omeje asserted that the role of community values, kinship ties, and Islamic dictates to use money to help others was often overlooked and that studying economic competition from businesses rooted in Indian diasporic communities and the ethnic Kikiyu population might also provide a worthwhile perspective on these transnational citizens and their economic behavior. The study of Omeje and Mwangi was based on interviews with 136 people, about half of whom were refugees. Others consulted included Kenyan police officers and members of rival Indian business communities. Because interviews often were conducted during business hours or broached sensitive topics, the data from the community was necessarily incomplete, but the researchers argued that there was definitely enough information to counter the prevailing stereotype of the economics of the failed state. As he concluded his presentation, Omeje showed photographs of a local branch of Chase Bank on the main street of Easteligh, fresh fruit hawking, a shot of First Community Bank, and a business plaza. The spectacle of dilapidated roads juxtaposed with modern shopping malls owned by refugee populations showed how the failures of infrastructure often coexisted with the successes of entrepreneurship.

(See this video of the Madina mall for more.)



Although efforts to "give the poor a stake in India's booming economy" have focused on giving Indian peasants title to the lands that they work, Syed Aiman Raza's study of landless tenant tobacco farmers attempting to capitalize on higher world prices emphasized the immediate context of decision-making in which the future may be less bright. In his study of 56 households, "Harvesting Death: Do Tobacco Growers Need Financial Inclusion? An Analysis into the Monetary Problems and Prospects Enshrouding Farmers Harvesting Tobacco in Basti District, Uttar Pradesh, India," Raza's claimed that his case study of Sikandarpur village shows that fertilizer input of DAP (diammonium phosphate), urea, or manure might not seem a worthwhile investment to farmers worried that landlords might evict them at any time. Although the area's Muslim farmers might have appreciated the 11% per annum loans offered by Purvanchal Gramin Bank, the cap on loans at 25,000 rupees might spur most farmers to also make agreements with money lenders, despite interest ranging from 5% to 10% per month if profits dependent upon the quality, color, and weight of their tobacco crop would benefit from the financial risk. Raza's data showed how pests and price volatility could wipe out even the most economically savvy farmer and how romanticizing financial inclusion might ignore the challenges of competition in global financial markets.

Sepideh Bajracharya's work on Nepali informal economies presented some of the most dramatic research of the day, as she attempted to explain the function of Dhukuti activities, which translates as "Treasury" or "Cash-Box," but may describe much less traditional economic activities of newly affluent Nepalis that model lottery schemes, rotation schemes, or bidding schemes that are characterized as "lucky-draw," "number system," or "releasing and eating" respectively. Her study, "Untouchable Wealth: The Moral Exchange of New Wealth among Women in an Urban Nepali Untouchable-Caste Community," chooses to present a somewhat different narrative about the sweeper caste Emukhel in the Kathmandu Valley who lived before the 1980s in houses of straw and mud once situated on a public defecating ground. These one-time untouchables no longer live in a "shitting ground." Instead their houses are of brick and cement with paned glass, closets, sofa sets, and gas stoves in communities with paved roads and attractive parks.

Bajracharya noted that although changes that generated this new wealth may be based on participation in the state and may be development-based, since city municipalities began hiring people as state-sanctioned sweepers, it is Dhukuti, or informal credit associations, often independently run by women in their forties and fifties, which inhabitants credit for allowing them to build and furnished their houses. She pointed out that there were significant differences between an "Economy of Need," which is an aid and development-based economy, and an "Economy of Pleasure" that is determined by access to and desire for consumer goods and services. She observed that the "pleasure element" of thrill, risk, uncertainty, risk, and flight marked the "late neoliberal moral economy" that she was describing in which social capital and income disparity may have served as critical ingredients.

Bajracharya detailed the activities of four dhukutis that she studied, which were based on rotation and number systems. Her informants were participants in both formal and informal economies who made little distinction between different kinds of credit and saving cooperatives. She argued that such people were most comfortable when their money is circulating, since there was a "certainty associated with a lack of trust. By not trusting any one in particular and focusing on "where you put your biscuit money," dhukuti participants might see enormous sums change hands. Bajracharya described wealth transfers occurring in "ten minutes" in a restaurant with "kebabs and dumplings." In this high-stakes environment, if you needed more money for the month, you would have to bid more. She observed that participants often adopted the same vocabulary as gambling, and that dhukuti might even be associated with dramatic murder cases, police raids, and numbers on the back side of an accounting book. Her future research would pursue the practices "historical dimension" and incorporate a "comparative perspective." (See this study for more about the practice.

The final panelist, Svetlana Tyukhteneva, regaled the audience with her tale of economic and ethnic difference in "Tell Me How You Earn and Spend Money - And I Will Tell You Who You Are," which followed the IMTFI tradition of presenting at least one paper about how livestock function as currency in households, as Tyukhteneva explained the value of camels and yaks, particularly at weddings and funerals, accompanied by a slideshow that began with an image of a man carrying a sheep.

The research idea is that the daily cash practices can serve as a symbol, marking the boundary between rich and poor, but also ethnic and cultural markers between living in the neighborhood of the two peoples. Their ways of making money, their methods of conservation, storage and use, the Altaians and the Kazakhs are different.

She explained the ethnographic value of certain stereotypes in the region, such as "Kazakhs bargain"; "they bargain at length." Furthermore, "if one neighbor buys a Mercedes, the other neighbor will do everything to get the same car." In contrast, "the Altai live poorer than the Kazakhs, but they sleep better." Such generalizations could be documented in more complex ways that foster economic understanding, and she provided copies of detailed accounting records of animals given in support of funeral feast as an example. Some of this cultural difference might be explained by religious preferences, beliefs and practices, since the Altai people were Shamanists and Buddhists for whom monetary passivity might be linked to their idea of fate. But her presentation that began with livestock reminded audience members of the built environment in which her subjects lived by showing graffiti on the wall of a marked that could be translated as "The Money is finished, Love - never."

Respondent UCSD colleague David Pedersen noted how these papers "set in the present tense" and were devoted to "identifying certain kinds of conjunctures" in which "when something happened, something else tended to happen," which could be visualized in "images and maps." He also observed how the papers did not work with the neat divisions of "public sector" and "private sector" that might be more familiar to Western audiences oriented around formal economies.

Liz Losh's Guest Blog: Beyond the 99%

In welcoming participants to the annual research conference for the Institute for Money, Technology & Financial Inclusion, where chocolate coins dotted the reception table, director Bill Maurer noted that the very value of membership in the formal banking system was already being hotly debated by conference participants at dinner the night before conference sessions even began. With the fate of the Euro in jeopardy, people being kicked out of the formal financial system in the developed world, bank protests, consumer rebellions against unfair fees and profit taking, and bank failures too frequent to be worth reporting in the nightly news, Maurer argued that banking the unbanked from the so-called "bottom of the pyramid" of financial life might be a missionary activity increasingly worth examining. Of course, as Maurer also observed, the Institute had always been interested in the many ways that the "end of banking" might be imagined from the apocalyptic to the mundane as a response to perceived crises in the formal economy.

Maurer reminded attendees that this was a conference known for providing a corrective to the just-so stories told by economists about twenty-first-century money as a set of transparent frictionless transactions that could be easily aggregated and numerically abstracted. As Maurer explained, it was a conference intended to draw on the knowledge base of a variety of other disciplines -- including agriculture, anthropology, design, and IT -- to explore material culture and social practices that might otherwise be treated as ephemeral or insignificant. Of course, this conference had welcomed papers in the past on everything that relates to IMTFI from an uncovering of underwear money to accounting with the bodies of dead migrant workers. To acknowledge the fact that the conference often celebrated money as well as studied it, Maurer introduced Catherine Eagleton of the Money Gallery of the British Museum.

Maurer told the story of the founding of the institute, which he traced to his initial experiences at a mobile money workshop at the Federal Reserve, where he apparently thought “now here’s a kind of financial innovation that we can all be excited about.” Although these "bridges to cash" might have been built most rapidly in the case of M-PESA and its 14 million accounts, Maurer asserted that this kind of "entire new business" was most notable because it reopened discussions of "the definition of money itself," which "changed the terms of discussion at moment when we need new terms."

Rather than have U.S. specialists "parachute in" to a given country, IMTFI emphasized funding the research of local and regional experts and suspicion of the tendency to "overuse economists." Maurer explained how there were now 100 researchers working in 50 countries who represented "other kinds of disciplinary training" and an "alternative sets of voices" at a conference that was tolerant of exploratory work that had not yet produced "completed research results" in the interest of facilitating conversation and disseminating new ideas. As Maurer pointed out, there was even "an ethnographer studying us" as a "community of scholars," whose work had already appeared in Critique of Anthropology. (Author Anke Schwittay presented a talk about Kiva last year.)

Women's Groups and Mobile Money in Eastern Kenya

IMTFI is happy to release our most recent working paper, a study of rural women's groups in Eastern Kenya and use of mobile money technology. Here is a brief summary and reflection from IMTFI researcher Ndunge Kiiti:

Our research in Kenya was a real eye opener in terms of what mobile money services rural women need, for their projects and groups to succeed.  The primary goal of our study was to investigate the use and impact of mobile money services (e.g. M-PESA, YU and Zap), among the 21 women’s groups, as a tool for poverty reduction in Eastern Kenya.  We met with the women from all the 21 groups, using the format of in-depth interviews, focus group discussion, or participatory observations.  The highlight of the process was a workshop we held at the end of our data collection process. What an experience!!! We had about 100 women (about 4-5 representatives from each group) participate.  Since ALL the groups use the M-PESA service, we were able to get in touch with the staff and they happily attended the workshop as well.  It was an extremely informative process, not just for the women’s groups but for the M-PESA staff.  They got to hear nine of the groups talk about various projects they are doing in the community.  They also got to hear some of the opportunities and challenges the women face in using M-PESA services.  The M-PESA staff were  extremely moved by the conversation.  Even if they had known this information prior to their workshop, it was good for them to hear, first hand experiences, from the field.  At times the staff seemed overwhelmed with all the women were doing with such limited resources and opportunities.  The M-PESA staff were able to share, the women’s groups, and also address some of the opportunities and challenges related to M-PESA services in rural areas.  They also provided products and upgrades that the women had access to at the workshop.  A highlight for the women was the M-PESA staff bring T-shirts for everyone!   That was a treat.  Overall, the dialogue was extremely productive and there was commitment to continue in conversation to see if there’s other ways M-PESA or Safaricom might partner with these women’s groups. 

Click here to read the paper! 

Alternative Banking and Social Inclusion

by IMTFI researchers Kurt von Mettenheim and Olivier Butzbach

This post reports on an international seminar sponsored by the Rockefeller Foundation in July, 2011 that brought together several of IMTFI's researchers with colleagues from around the world to discuss alternative banking and "social" inclusion. Often we read and research financial inclusion without reflecting enough on social justice and social welfare policies that may or may not accompany financial inclusion goals. This conference took up this issue.

These ideas were first explored in 2006 at an international seminar in São Paulo and developed further at the 2009 Meeting of the Society for the Advancement of Social Economics in a session entitled “An Alternative Banking Business Model? Savings, Cooperative and Public Banks in the Current Financial Meltdown.”  We have since worked with business and public policy schools and alternative bank groups and associations to build a network capable of launching new Core Principles for Alternative Banking and Social Inclusion. The July seminar confirmed the potential for new technologies at large alternative banking institutions in developing and emerging countries to accelerate social inclusion (and maintain it in advanced economies).

Evaluating The Social Impacts of Mobile Money Services in Cambodia

By Jeff Fang

Between March to September 2011, I collaborated with WING Money Cambodia (WING), a leading mobile money services provider in Cambodia, on a research project to evaluate the social impacts of mobile money services in Cambodia.

Currently,WING allows any customers (individuals and businesses) to transfer, deposit (cash-in) and withdraw (cash-out) money between each other and with anyone in Cambodia as well as top up their pre-paid mobile phone credits with their SMS-enabled mobile phones at low cost. Payment transactions like sending/receiving money, phone top-up can be done from any mobile phone, and secured by a personal 4-digits pin code. There is no monthly fee charged for holding a mobile wallet with WING and all the money are safely stored in a regulated bank.

I am both thankful and privileged to be part of this research collaboration with WING. It has been an exciting journey for me to travel to different rural towns to interact with different mobile money community sales representatives, customers and merchants/agents to find out first-hand how WING’s mobile money services has really made positive changes to their small business activities, local cultural norms, social well-being and financial management habits.

Below are 2 customer profile stories which are shortened versions of more detailed interview sessions conducted as part of the current research project collaboration between RMIT University Australia and WING. The names have been left out for privacy concerns.

IMTFI PANEL at 54th Annual Meeting of the African Studies Association

By IMTFI researcher Vivian Dzokoto

Since 1957, the African Studies Association (ASA) has converged individuals with academic and professional interests in Africa, and served as the leading North American organization promoting the academic study of that continent. This year, IMTFI sponsored a panel at ASA’s annual meeting in Washington, D.C. In line with the conference theme “50 Years of African Liberation,” the IMTFI panel was titled “Money, Technology and Financial Inclusion in Africa: What We Know After 50 Years of Liberation.”

Out of the conference’s 214 panels, the IMTFI-sponsored panel was the only one that focused on contemporary financial services and the poor. The panel highlighted major findings from 4 of 20 research projects focusing on various countries in Africa that IMTFI has funded over the past 3 years. Presenters examined pathways and obstacles to achieving financial inclusion for the poor in Botswana, Ghana, Kenya, and Ethiopia.