When three anthropologists embark on a study of new money – e-commerce, cash cards, mobile money, retail credit cards, and more – the findings can easily fill a book. Money at the Margins, by researchers at the Institute for Money, Technology & Financial Inclusion at UC Irvine, takes a deep dive into the global uses and local impact of new forms of financial services, and the many ways in which technology is changing the way people think about, spend and save money. Here, editors Bill Maurer (BM), Ivan Small (IS) and Smoki Musaraj (SM) discuss how they came to study money and why understanding the human impact of new technologies and money’s use matters.
How - and why - do three anthropologists come to study money? And how is that study different from one an economist might do?
SM: Anthropologists have been studying money for a long time, providing a critical perspective of its meanings, uses, and changing forms. One key insight by anthropologists is noticing that money takes on different meanings and values in different contexts; in some contexts, for instance, giving money as a gift is considered an insult while in others it is a symbol of affection and respect. Another aspect of the study of money unique to anthropology is taking a broader approach to the objects that are used as money in different cultural contexts. A number of the contributions in Money at the Margins, for instance, introduce us to a wide array of objects--cash, jewelry, mobile money, retail cards, social status--used as money in everyday transactions. These studies underscore the multiplicity and the earmarking (using different kinds of money for specific purposes) of different forms of money by people living under $2 a day.
IS: Each of us came to this project having previously done research on various aspects of money in the global economy, from international remittances to pyramid schemes to offshore and Islamic banking and alternative currencies. In our prior studies, we were keenly interested in the social and cultural aspects of money – how it shapes and how it reflects various societal formations and transformations. The introduction of the book describes some of the general frameworks from economic anthropology and sociology where we see potential interventions. These approaches typically differ from economic theories of money in that they are more attuned to what money reveals rather than what money does – the classic economic definition being that money acts as a unit of account, means of storage, store of value, and method of payment. But it is always also more, and when one emphasizes an observational rather than utilitarian or predictive approach, it becomes apparent that the seemingly universal tool of money operates differently in different contexts. As editors but also anthropologists, we encouraged the contributors to dwell on their own participatory immersion and qualitative observational approaches, letting the stories they encountered during research lead the way, rather than push for interpretive closure. The outcome is illuminating. When we hear for about the extremely lively and social spectator dimensions of rotating credit associations in Nepal described in Sepideh Bajracharya’s chapter, or the ways that dual currencies map on to the ways Cubans conceptualize their country’s position inside and outside of a global economy in Mrinalini Tankha’s work, as just two examples among many, we gain a taste of the rich socio-cultural complexities of money.
Various chapters in the book talk about new forms of money - particularly mobile money. What is it, why is it important, and how is it used differently around the world?
IS: Mobile money has served as a specific, and relatively simple, technology to address a basic challenge of how to transfer value across distance when one does not have a bank account. Mobile money is essentially value that is remitted, stored, paid and cashed out via cellular phones and demonstrates how people around the world have found creative ways to address their financial needs by using the tools that are most immediately available to them. Here in the U.S., we generally have monthly cell phone plans, and most of us have smart phones. In many countries in the Global South, however, people use simple Nokia style phones from a previous generation to communicate, and generally pay for their service through top up plans. That is when you run out of credit, you buy credit to top it up and do so by inputting the pin number into your phone. Very early on, rural to urban migrants in places like Kenya figured out that this top up plan also offered a way to transfer value across distance. Instead of buying credit to top up one’s own phone, you call your mother in the village and give her the credit, so that she does not have to pay for it and can save that money for other uses. Before long, people were cashing out that credit, by passing on the code to a third party who would then give money in return, minus a small fee for their service. So innovation for remittance solutions was being driven from below. Once the telecommunications companies saw this, they began to formalize and enclose the process. Now, you have formal systems of value transfer, called “mobile money”, which have become widespread in countries like Kenya and the Philippines, especially where government financial regulators have allowed telecom companies to provide banking-like services. With the success of mobile money have come other offerings, such as micro-loans that gauge one’s creditworthiness based on one’s mobile money history. This in turn has led to the development of entire ecosystems of cashless economies among the unbanked. What is more, participation in such systems have also in many cases provided on-ramps to formal banking and thus proper “financial inclusion”. But the results are mixed, and to understand how uptake differs between countries, regions, ethnicities, genders, and generations one has to approach the issue with an ethnographic lens, which is what many of the chapters in the book do.
SM: The research compiled in this book demonstrates that new forms of money--such as mobile money, digital cash grants, and department store credit cards--are used for different purposes in different contexts. One key finding is that these new forms of money are used alongside (rather than instead of) more traditional forms of money such as cash or bank cards. Another key finding is that these new forms of money are used in accordance with socio-cultural norms. For instance, in Kenya, according to Sibel Kusimba et al, mobile money is often used to make social payments for funerals or weddings; in India, according to Mani Nandhi, mobile money is primarily used for savings. In other words, the book calls attention to regulatory as well as socio-cultural context for understanding the uses (or lack thereof) of mobile money.
Other chapters highlight the socio-cultural effects of these new forms of money. Kusimba notes that mobile money enables people, especially women, to redraw their social networks; Kevin Donovan however, argues that bank-mediate cash grants for low-income citizens of South Africa have introduced new concerns about the privacy and financial autonomy of the unbanked. All in all, these chapters underline the complex dynamics involved in the meaning, value, and uses of new and old forms of money.
Mobile money has been touted as a potential solution to financial inclusion. What does that mean and if it’s not a solution, what might be?
BM: This is a contentious topic. Very early on in the development of mobile money services, they were pitched to government regulators as a way to get people into the formal economy--the economy of digital recordkeeping rather than the informal economy of cash--so that governments could assess and collect taxes. That was a great sell to the governments, but didn’t really inspire anyone else. Spurred on by the United Nations Millennium Development Goals which called for providing universal access to formal financial institutions, mobile money providers started stressing “financial inclusion.” The idea was that using mobile money was an onramp to things like bank accounts and bank loans. On the one hand, being included into formal financial institutions like banks means greater consumer protections, guarantees against fraud, and safeguards from theft. On the other hand, as we all know from predatory lending practices, usurious interest rates, and the financial crisis of 2008, “financial inclusion” can expose people to new kinds of risks. Nevertheless, at least in some contexts, mobile money has opened doors to banking for many poor people who previously had those doors shut in their faces.
SM: Echoing Bill’s comments, read together, the chapters in this book provide insight into a number of pros and cons of various financial inclusion efforts, including mobile money services, in various parts of the Global South. The case of Kenya, which we have brought up frequently here, underscores the potential of mobile money to extend access to financial services to people living in remote rural villages. A similar case is made by Jing Gusto and Emily Roque on the benefits of cash grants via banks for various communities in the Philippines. In other words, mobile money can remedy some of the limitations of existing formal financial institutions. But research in other areas or with specific groups, shows that these new forms of money are not always convenient, inclusive, or cheaper. For instance, Ndunge Kiiti and Jane Mutinda show the limitations of mobile money for the visibly impaired in Kenya while Gusto and Roque discuss how indigenous populations in the Philippines are excluded from digital cash grants. Some researchers provide explicit recommendations for policymakers and industry leaders in designing better financial products that are tailored to people’s contexts and needs. For instance, Echeverry and Cuartas draw a list of recommendations for future financial products that would target the unbanked in Colombia. These recommendations challenge industry leaders to reimagine their ways of measuring creditworthiness and value and to think creatively about expanding access and reach.
Your title is an interesting one - Money at the Margins. What do you mean by “margins” and why is studying money practices here important?
SM: Our focus on the “margins” of global economy calls attention to the various economies that proliferate at the margins of global financial flows. These economies take place mostly (though not entirely) outside formal banking systems and regulatory regimes, are typically in cash (and soft currencies), and cut across multiple markets and payment platforms. Some examples discussed in the book include cash and mobile exchanges among migrant laborers along the Haitian/Dominican border; rotating and savings associations (dhukuti) among social networks of women and men in Nepal; game networks operators that provide financial services to informal workers in the city of Medellin, Colombia; and shared usage of department store credit cards among low-income families in Chile. These chapters provide insight into how these economies of the margins seek to circumvent the forms of exclusion generated by formal financial regimes. For instance, the study of financial practices along the Haitian/Dominican border by Taylor and Horst highlights the creative economic practices that Haitian migrants deploy to circumvent the structural forms of economic and political exclusion that the border imposes on their livelihoods.
IS: Development practitioners call the poorest of the poor, who for the most part do not have bank accounts, the “bottom billion”. While they may be at the bottom of the formal financial economy, they also represent 1/6 of the world’s population, and for this reason we wanted to re-center what those who are on the so called economic margins are actually doing and re-think why we consider them marginal. There is of course an important practical aspect - while the bottom billion was for a long time ignored by the banking sector, now there is increasing attention to how empowering the unbanked with small lines of credit and microfinance, or safe and cost effective remittance transfer channels, can help reduce poverty in some of the world’s poorest communities. Effectively addressing poverty also demands challenging the political and economic structures that are designed to include some while excluding others. These initiatives are important and ongoing, and in the meantime attention to the financial lives of the poor have also heightened recognition that the poor actually navigate quite complex spending, transfer and savings patterns. This includes how unbanked populations creatively navigate their experienced limitations but also intersections of participation in financial institutions and infrastructures. Reflecting on money at the margins then is also about disrupting a simplified and often misleading formal / informal analytic binary when it comes our understandings and perceptions of what constitutes the economy.
What insights did you gather in working with so many researchers and how might this information be used?
SM: I felt personally committed to this project precisely because of its mission to bring together research from diverse and interdisciplinary group of scholars from or based in the Global South. The prime goal of this volume (and of IMTFI generally speaking) was to produce and disseminate first-hand knowledge about technological innovations in the sphere of money and financial inclusion from the perspective of people living in the countries and contexts where such developments are taking place. These voices are by and large absent from the spaces of policy-makers and industry leaders interested in new money technologies for financial inclusion. Findings from this book altogether suggest that the success or failure of technological innovations such as mobile money are context-specific. For example, while the mobile money service, M-Pesa, has been extremely successful in Kenya, overcoming the usage of formal banks for money transfers and remittance sendings, similar services have not had the same success in countries such as India or Colombia, where the so-called unbanked find cash or other forms of money more convenient and less costly.
BM: So many of the high-level conversations about new financial technologies or “fintech”, and about “banking the unbanked” or financial inclusion, take place in the halls of global institutions without any representation from the people and communities actually impacted by these new technologies and systems. We set up IMTFI specifically to remedy this - to build a global brain trust of researchers from countries where new payment and financial technologies were being “deployed” (and we chafe at the military metaphor here!). We believe strongly in diversifying the voices at the table where big decisions are being made about the future of money and transactions. They provide important insights; fill gaping holes in knowledge; and put the spotlight where it ought to be: on the human side of new technologies and the role of money in helping people live the kind of lives they aspire to rather than some cookie-cutter mold predetermined by Silicon Valley, D.C. or London.
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Bill Maurer is dean of the School of Social Sciences, professor of anthropology and law, and director of the Institute for Money, Technology and Financial Inclusion at the University of California, Irvine.
Smoki Musaraj is an assistant professor of anthropology and director of study of the Anthropology Honors Tutorial Program at Ohio University.
Ivan V. Small is an associate professor of anthropology and international studies at Central Connecticut State University.
pictured: IMTFI fellows Jude, Sangaré and Kusimba at Day 3 Workshop (2014).