Institute for Money, Technology & Financial Inclusion

This is the 2-page executive summary for the IMTFI Working Paper: Effects of Mobile Money on the Savings Practices of Low-Income Users - the Indian Experience by Mani Nandhi.

In 2011, 65% of India’s population did not have access to a bank account. Nevertheless, India’s socalled “unbanked” save by other means for everyday expenditures and emergencies. Traditional forms of saving include leaving money in gulaks (Fig. 1), with trusted friends or relatives, or in savings clubs. Many of these practices, however, are often risky or inefficient.

From Ghana to Papua New Guinea, mobile money services have emerged as a safer and more efficient savings mechanism. Mobile money provides a means of financial inclusion for the unbanked. In India, there are now six mobile money services enabling banking at very low cost.

This is the 2-page executive summary for the IMTFI White Paper Report: The New Financial Architecture and the Public Mobile Money System in Ecuador

Current Ecuadorian President Rafael Correa’s broader political program called the “Citizens’ Revolution,” has prompted a restructuring process of its domestic financial architecture through a combination of legal reforms, new public policies, and the transformation of the national payments system. As part of this endeavor, a new mobile money (MM) system is being introduced to diversify the available forms of payment. The high percentage of Ecuador’s unbanked population (70.5%) in comparison to the increased permeation of cellphone coverage in Ecuador (16.9 million cell phones for 15.4 million people) indicates the tractability of this project at the national level. The MM system will be executed and administered by the Central Bank of Ecuador(BCE), making it the first ever publicly mandated and Central Bank-administrated mobile payments scheme to be implemented in the world. MM is thus conceived as a liability of the state, with all the qualities and functions of legal tender.

Inspired by 21st century socialism, this MM system is based on the idea that money and systems of finance and payment are public goods. The BCE’s objective is to avoid the privatization of MM because other cases have indicated that mobile operators tend to become the sole providers of services, generating monopolistic and oligopolistic practices. Guided by a constitutional mandate to remake Ecuador’s economy as a “popular and solidarity economy” the CBE’s MM model seeks public benefit, financial inclusion of marginalized populations and poverty reduction. The project expects its main users to be savings and credit cooperatives, community organizations, family businesses, informal economic actors, and others who have been traditionally excluded from the banking system.

This is the 2-page executive summary for the IMTFI Working Paper: Patterns of Financial Behavior Among Rural and Urban Microfinance Clients: Evidence from Tamil Nadu, India.

Over the past decade, development planners in India and beyond have increased their efforts at targetting financial inclusion as a means of poverty alleviation. However, the nature of poverty and deprivation, the livelihoods, and the financial needs of the poor vary widely across rural and urban India. The study by IMTFI researchers Lakshmi Kumar and Jyoti Prasad Mukhopadhay seeks to identify some key differences in the financial behavior of the rural and urban poor as an essential step towards designing more targeted financial tools. The study used financial diaries to collect data on income, consumption, savings, loans, and insurance from a sample of poor households over a period of six months.

Final Report/Synopsis of Research Results: Technological advances on mobile technology has made it possible to transfer money faster and cheaper even to distant areas. Philippines-based service providers have turned this technology into a multimillion peso business. Development practioners have drumbeated its potential,particularly in financial services, in serving frontier areas or geographically distant , hard to reach locales with pockets of economically challenged and socially excluded populations. Frontier areas have money ecologies that develop in the context of poverty, coping and distance from centers of power and commerce.

Final Report/Synopsis of Research Results: Following the 2007 redenomination exercise in Ghana, we wondered what impact it had on the most financially vulnerable populace in Ghana. It is our assertion that the redenomination of the cedi may have had a unique impact on Ghana’s urban poor with respect to their money management, saving behavior, and financial literacy. This study focuses on the coping strategies adopted by those living on less than a dollar a day post redenomination.

Final Report/Synopsis of Research Results: The author, in this study sponsored by IMTFI, assesses whether the poor have been able to gain access to banking facilities in the backdrop of the initiatives taken by the authorities to provide finance for all. Financial inclusion or providing finance for all has been increasingly recognized in recent times as a pre‐requisite to economic development and poverty reduction. Financial inclusion can be defined as the process of ensuring timely delivery of financial services at affordable cost to the disadvantaged sections of the society. Financial inclusion empowers the poor to deal with the formal financial institutions, and thereby to enhance their savings, investment and risk‐absorption capabilities. This enables them not only to facilitate consumption smoothing on a day‐to‐day basis but also eventually to come out of poverty. Despite the expansion of formal financial facilities following the financial sector reforms in Sri Lanka, the available evidence suggests that a greater proportion of the poor in the country are still unbanked.

These snapshots of gender and financial inclusion provide a glance at some of the ways women interact with different forms of money in a shifting global financial landscape. Based on research conducted by IMTFI researchers all around the world, these snapshots address the way gender relations get reworked when money circulates through digital technologies and is regulated by new financial institutions.

Research from the Philippines, Kenya, Paraguay, Nigeria, Mexico and India demonstrates that women’s access to and engagements with money are extremely varied and strongly influenced by entrenched socio-cultural and economic modes of exclusion. Therefore women employ a host of different financial management strategies as means of empowerment – from hiding money in coke bottles, to rearing ruminants to speculating in gold. Moreover, financial education of women emerges as an important prerequisite for financial inclusion and one IMTFI research team recommends the use of cartoons and visual media to achieve that goal.

In March of 2015 IMTFI arranged for a comprehensive visit to India to gather updates on four sponsored research projects with the following fellows and researchers: Mani Nandhi, Deepti KC, Nithya Joseph and Janaki Srinivasan.

This synthesis brings together the series—7 blogposts (10/2/2015-10/21/2015) featuring the four case studies—written up by IMTFI conference blogger Liz Losh. It examines a broad range of financial inclusion issues for specific targeted populations that differed by region, gender, and occupation. These studies included in-depth long-term field work with Delhi rickshaw pullers, rural women in Bihar, fishermen in Kerala, and silk workers in Karnakata.

Think back to 2008: the first iPhone had just been released. M-Pesa, Safaricom’s mobile transfer service, was just beginning to hit the Kenyan countryside. The extent of the global financial crisis was becoming known. At the University of California, Irvine, south of Los Angeles, researchers had just begun thinking about the collision between mobiles and money. Founded that same year, the Institute for Money, Technology and Financial Inclusion (IMTFI) was in the process of supporting its first set of research projects, in countries ranging from Nigeria to Indonesia. When it funded its first cohort of 17 researchers from around the world in 2009, only a handful were exploring the expansion of mobile money technology. Three of the projects were in sub-Saharan Africa–in Kenya, Botswana and Nigeria. The other projects focused largely on alternative currencies, informal savings practices, programs. Five years later, in 2014, almost all of IMTFI projects involved research on mobile money, and 50% were being conducted in countries in Africa.

The article is part of the January 2016 issue on "The Poverty of Development Strategy in Africa" and provides a comprehensive look into IMTFI's research findings in Sub-Saharan African from 2009-2104. It traces shifts in the mobile money landscape and also discusses patterns that endure by highlighting the role of deep histories, rank and hierarchy, ritual and religion and the stickiness of trust in understanding user interaction and uptake of new technologies. The article further emphasizes the role of  locally embedded rich qualitative research and offers suggestions for new future directions in mobile money research in the region.

This toolkit was produced as part of the IMTFI’s Consumer Finance Research Methods Project. It demonstrates how different methods are being applied in finance research to help both for-profit and not-for-profit organisations cope with rapid changes in the sector. It is designed to help researchers and managers to: 1) Learn about innovations taking place in consumer finance research; 2) Understand how to use research to improve their organisation’s strategy; 3) Facilitate connections between researchers and organisations with complementary expertise.

Just as consumers have an ever-increasing choice of financial products, researchers have an ever-increasing array of methods at their disposal. This Toolkit provides readers with inspiration for ways they can develop their research, either by themselves or in collaboration with others. Readers can choose to learn about applications that are familiar to them, or discover entirely new methods and professionals who practice them.

The document summarizes research conducted by frog researchers in India to understand how urban slum dwellers access and use drinking water. The researchers traveled from Ahmedabad to Delhi, visiting slums and interviewing residents. They found that while water is abundant, the supply is rarely clean and reliable. Slum residents struggle daily to obtain the water they need. The researchers hope their findings will help solutions like Sarvajal's "water ATM" model expand access to clean drinking water for slum communities.

This report, which precedes the final report for this project, explores further discussions and research of the research terms for the “Landscaping Mobile Social Media and Mobile Payments in Indonesia” project. It draws particularly on insights emerging from the workshop “Landscaping Mobile Social Media and Mobile Payments in Indonesia,” which took place in Surabaya, Indonesia, on September 28 and 29, 2012.

This study is an ethnographic account of the Shia population attached to Zardozi (embroidery) in Lucknow, who are reeling under intense poverty and suffering as a result of pittance. This study contributes to the linking of micro levels of analysis of money management through informal financial network of Rotating Services and Credit Association (ROSCA), popularly known as Beesi, among the poor skilled Zardozi (embroidery) workers in Lucknow. The research facilitates verbatim accounts of embroidery workers about what they want, what they expect of themselves and how they make their choices that they can make. The study is open to a wide spectrum of readers belonging to developmental studies, economics and microfinance who are interested in understanding real life situations confronted by the poor in third world countries.

This paper examines the various practices used to achieve income and consumption smoothing amongst the poorest households in Yogyakarta, Indonesia. It looks at selected 125 households, representing 25 households in each of the five regions of the Yogyakarta area. It designated how rural financial institution and other can help them to have better smoothing strategy. We found that the behaviour varies in response to the types of profession and gender. Furthermore, the source of the income fluctuation also matters in determining households’ responses. However, the source of the consumption fluctuation did not appear to differ across professions.

This paper explores modernity and gender in a traditional society, focusing on the informal storing of money among indigenous populations in the Philippines, through 69 semi-structured interviews and observations. In these indigenous populations – Bontoc, Tagbanua and Higaonon – traditional forms of money are utilized side by side the modern form depending on the type of transaction. Money storage patterns differ by gender, arising from varying comfort zones, spending frequency, and amount of money stored. Modernity reworks traditional gender relations between spouses where money becomes a source of conflict, as they maintain tradition and absorb modern ideas of individuality and empowerment.

Financial practices are not only about money. This paper discusses how people living and working in the Mexico/United States borderlands weave their economic lives by combining, associating, and disassociating formal and "informal" currencies. We base our analysis on transactions carried out by women who commute regularly between the twin cities of Mexicali and Calexico,detailing their financial practices; the frameworks of calculation they employ; and the social, cultural, and financial mechanisms they and their families use to cope with their daily lives. These include the use of monetary and non-monetary calculations and resources, different types of indebtedness and forms of reciprocity. Such findings reveal mistakes in the tenets upon which much anti-poverty and financial aid programs are based. A focus on people's use of particular calculations, resources, and social relations will help substantiate better alternatives that can be implemented in supporting their economies.

Current mobile money systems provide users with hierarchical user interface and represent money as a positive rational numbers of the form 1, 3, 4.87...N. However, research indicates that rural communities that cannot read and write have a challenge entering such numbers in to mobile money system. Navigating through hierarchical text menu is also difficult to illiterate individuals. The present study uses concepts like memory placeholders, dragging & dropping; swiping, temporary holding space, and frequency counter and proposed a system that consists of three layers. The first layer denotes user interface and uses photos of currency notes, second layer is a placeholder memory that keep record of the frequency of currency bill, and the last layer keeps record of the total digital money in the system. We believe that the proposed system enables illiterate to identify currency notes while making payments and receiving payments, count digital money while making payments and or receiving payments during transaction.

Mobile Money (MM) is now a popular medium of exchange and store of value in parts of Africa, Latin America and Asia. As payment modalities emerge, consumer preferences for different payment tools evolve. Our study examines the preference for, and use of MM and other payment forms in both Ghana and Zambia. Our multi-method investigation indicates that while MM preference and awareness is high, scope of use is low in Ghana and Zambia. Cash remains the predominant mode of business transaction in both countries. Increased merchant acceptability is needed to improve the MM ecology in these countries