Institute for Money, Technology & Financial Inclusion

Translated by Sophie Chevalier and Emmanuelle Lallement

À première vue, la scène du marché de Makola n’a rien de vraiment particulier : des milliers, voire des centaines de milliers de personnes déambulent en plein air, parfois épaule contre épaule, dans les rues d’une zone qui couvre plusieurs pâtés de maisons, passant devant des étals de for-tune composés d’un simple carton sur lequel des marchandises sont exposées, ou devant des stands un peu plus élaborés, protégés par un parapluie portant la marque d’une société de télécommunication probablement disparue. À l’intérieur du « nouveau » marché, on suit un labyrinthe de couloirs sur plusieurs étages, certains ouverts à l’air libre, d’autres non ; ici, des vendeurs de poissons, des marchands d’épices installés près d’un conteneur métallique converti en moulin; là, des femmes présentent des tissus empilés jusqu’au plafond, à côté de couturières qui peuvent vous confectionner une chemise sur place. À l’étage, on trouve encore des vêtements, des appareils électro-ménagers, des articles en plastique... Le « vieux » bâtiment du marché se présente à peu près de la même manière...

...Mais si l’on y regarde de plus près, quelque chose de bien particulier se déroule dans cet espace du marché, théâtre d’une activité commerciale si humaine. J’ai déjà mentionné plus haut les fameuses compagnies de télé-communication. On peut en effet apercevoir des antennes-relais de télépho-nie à chaque pâté de maisons, voire à chaque demi-pâté de maisons. Les gens sont littéralement accrochés à leur téléphone portable. Nous sommes après tout au pays de l’argent mobile ; les systèmes de paiement en ligne sont partout présents en Afrique subsaharienne. Inaugurés en 2007 par l’opérateur de réseau mobile du Kenya, Safaricom, avec son service M-Pesa1 qui a fait couler beaucoup d’encre, ils inondent le marché. À Accra, le mot « Momo » (mobile) est sur toutes les lèvres.

Cependant, et c’est le fait remarquable, tout le monde paie ici en espèces.

--- English version available on Supplemental Material tab.

At first glance, the scene at Makola Market seems unremarkable: thousands, perhaps hundreds of thousands, of people stroll through the open air, sometimes shoulder to shoulder, in the streets of an area spanning several city blocks, passing makeshift stalls consisting of simple cardboard boxes displaying goods, or slightly more elaborate stands sheltered by umbrellas bearing the logo of a likely defunct telecommunications company. Inside the "new" market, one follows a labyrinth of multi-story corridors, some open to the air, others not; here, fishmongers, spice merchants set up near a metal container converted into a mill; there, women display fabrics piled to the ceiling, next to seamstresses who can make you a shirt on the spot. Upstairs, one finds more clothing, household appliances, and other items...

...On the other hand, however, there is something quite remarkable about this space, this all too human scene of commercial activity. I’d mentioned the telco companies. You can see cell phone towers every block or so, or even every half block. People clutch mobiles. This is the land of mobile money, after all, the mobile phone based payment systems ubiquitous across sub-Saharan Africa, inaugurated in 2007 by Kenya’s mobile network operator, Safaricom, with its much-vaunted M-Pesa service. “Momo” is on the tip of the tongue here in Accra.

Yet everyone is paying with cash.

Crowdfunding to support personal and medical needs has risen in popularity in recent years. Many sociologists are critical of needy individuals’ turn to online fundraising, seeing it as a response to deficits in health care and social protection, and arguing that it may widen social inequalities. Most of these studies have taken place in the United States, China, and Great Britain. This paper explores crowdfunding in sub-Saharan Africa, offering us an opportunity to rethink the context and value of crowdfunding and its relationship to family and friend networks, philanthropy, and charity. It also examines how online crowdfunding relates to cultural ideas about dependency and care. Based on my ethnographic fieldwork at the Nairobi crowdfunding platform M-Changa conducted from 2016 to 2021, I describe how social entrepreneurs, women, and NGO representatives raise money for philanthropic initiatives, medical and education costs, family rituals, and COVID-19 relief. The paper reveals the diverse financial relationships, identities and goals emerging on the platform. Reflecting on this diversity of caring finance, this paper then explores the ambiguous commercial, social, and political potentials of crowdfunding as peer-based digital finance in the Global South.

We test if 3534 beneficiaries of PROSPERA, Mexico’s cash transfer program, smooth food consumption before and after the date of the transfer receipt, and if consumption smoothing is costly. The transfer is an anticipated and transitory income shock and, thus, the PIH predicts that consumption should be smooth before and after its receipt. We find that food consumption does not change the days before and after the transfer date and we find no evidence that households bear costs to smooth consumption. The transfer’s cost of access, which encompasses participants’ distaste for using debit cards and costly ATM withdrawals, may help time-inconsistent and less experienced debit card holders smooth consumption.

Financial transactions have been an integral part of people’s everyday transactions the world over. Whether in the form of cash, credit, plastic cards or today, using digital platforms, these transactions continue to both structure and be shaped by the existing social order . Using a “social meaning of money” framing , this chapter draws on examples from around the world to better understand how people give, receive and save money in the Digital Age. In the process, it attempts three shifts in focus: (1) from the inherent value of monetary technologies to how this value is constituted in practice within specific constellations of norms, values, power relations and resource distribution, (2) from the use of digital platforms to the integration of their use with non-digital artefacts in practice, and (3) from the innovativeness of technology design to the innovativeness of its users. The chapter finds that while mobile financial tools and associated data may well be making the world of financial transactions more inclusive in some ways, they simultaneously risk excluding certain categories of people, practices and geographies from the economy. By alerting us to the promise and perils of newly introduced modes of transacting our finances, this chapter will urge its audience to think more realistically about how to better design such tools and the policies regulating them.

We study an at-scale natural experiment in which debit cards were given to cash transfer recipients who already had a bank account. Using administrative account data and household surveys, we find that beneficiaries accumulated a savings stock equal to 2% of annual income after two years with the card. The increase in formal savings represents an increase in overall savings, financed by a reduction in current consumption. There are two mechanisms. First, debit cards reduce transaction costs of accessing money. Second, they reduce monitoring costs, which led beneficiaries to check their account balances frequently and build trust in the bank.

Why do people trust each other? Do people form groups through mutual trust or self-interest? How does the theory of rational choice and accompanying individualism affect the concept of social capital? Are social cohesiveness in groups and financial success related? Such questions generate interest in conditions promoting association and group emergence, such as trust, reliability, reciprocity, and shared values, which are inherent factors for cohesion. Self-help groups (SHGs) in an urban context are used to comprehend the aforementioned questions. The proposed study is based on the following hypothesis: the formation of groups is not based on trust but on material- and non-material- need-based individual rational choices that force them to cooperate with each other. It is found that a sense of insecurity among migrant women, an emotional need, led the formation of the imagined communities and has paved the way to construct trust. Thus, trust is found to be secondary in construction and sustainability of social capital. Castes, regions, and religions are strong factors; however, they are found to be less effective for the migrants than native SHG members. Therefore, among migrants, trust channelized itself vertically around a sense of fear.

I present evidence that unmet liquidity needs for indivisible, "lumpy," expenditures increase demand for betting as a second-best method of liquidity generation in the presence of financial constraints. With a sample of 1,708 sports bettors in Kampala, Uganda, I show that participants' targeted payouts are linked to anticipated expenditures, while winnings increase lumpy expenditures disproportionately. I show that a randomized savings treatment decreases demand for betting. And I use two lab-in-the-field experiments to show that unmet liquidity needs and saving ability are important mechanisms. These results cannot be explained by betting as a purely normal good.

Rapid urbanization is reshaping economies and intensifying spatial inequalities. In Bangladesh, we experimentally introduced mobile banking to very poor rural households and family members who had migrated to the city, testing whether mobile technology can reduce inequality by modernizing traditional ways to transfer money. One year later, for active mobile banking users, urban-to-rural remittances increased by 26 percent of the baseline mean. Rural consumption increased by 7.5 percent, and extreme poverty fell. Rural households borrowed less, saved more, sent additional migrants, and consumed more in the lean season. Urban migrants experienced less poverty and saved more but bore costs, reporting worse health.

The rapid expansion of mobile money technologies in Zimbabwe has substantially altered the monetary ecology and the payment landscape. This article examines the ways in which the adoption, usage and meanings attached to mobile money (re)configure social relationships in the rural community of Chivi. We demonstrate the ways in which mobile money technologies mediate the politics of everyday social relations and shape local social relations in profound ways. Drawing on ethnographic fieldwork, we explore the complex ways through which mobile money makes and unmakes social relations between transacting parties and between the agents themselves. Our main finding is that the impact of mobile money on social relations in the community is predominantly ambivalent. We observed that mobile money triggers contestation, hostility and conflict while simultaneously fostering social solidarity and convivial relationships. The main sources of contention in mobile money transactions in Chivi involved space, currency conversion exchange rates, identification and charges. These are, however, unintended consequences of mobile money usage in Chivi.

As financial transactions are increasingly digitized, old and new kinds of intermediaries are only expanding in importance. Intermediaries, mediators and brokers sit at critical junctures and operate between diverse financial arenas and pathways. We argue that mapping the intermediate entails identifying how different kinds of actors—human and non-human, objects and interfaces, institutions and practices—delimit or reify but also stitch together and overcome spatial and temporal differences in people's financial lives, while taking on varying burdens of risk. Mapping the intermediate is both an empirical and methodological exercise. Empirically, it requires following the agents and traders, brokers and material objects that facilitate transactions and add, extract, or re-work different kinds of value. Methodologically, intermediaries and the intermediate are not only the objects of analysis but act as analytical tools in their own right, making the process and politics of transactions visible and tangible. Attending to the intermediate in our inquiries around money, currency and new digital financial technologies, thereby, offers new directions for grounding finance in politics and history and better connecting micro and macro and local and global economic processes.