• About
  • Profiles
  • Projects
  • Publications
Beyond Market Prices

mobile phones in trade and livelihood activities – Ghana, Uganda, India, China

  • About
  • Profiles
  • Projects
  • Publications

Browsing Tags India

Branding in Branchless Banking

Posted on October 13, 2012 by

M-BANKING IN THE DEVELOPING WORLD

Imagine you have just migrated from the state of Bihar to the glamorous, full of promise, chaotic capital of New Delhi. You have moved so that you can earn more money and therefore, provide a better life for your loved ones. But how do you send this money back home? Often there are informal systems that involve trusting your precious money over to a friend, a friend of a friend, or possibly even a stranger, who will be travelling back to your home village or town. Sometimes they may do this for you without a charge, but more often than not, this service will cost you. And once your money has been dispatched with your messenger, so to speak, you will wait for a few days, a week, to call home and check if the money ever made it to its destination or not. This method involves a substantial time lag between sending and receiving money which may seem inordinate given the inherent risks associated with the informal system. Formal options for the transfer of money do exist but are expensive and therefore not very popular.

Mobile banking is a type of branchless banking that leverages the mobile phone as a platform over which financial transactions, especially remittance transfers as current trends indicate, may be conducted. Mobile banking as a transformational platform in unserved regions has generated a lot of buzz in the technology and development world, with Kenya’s M-Pesa being presented as an ideal, although its success has not quite been fully replicated (this has been attributed to certain economic, social and political factors, as well as Safaricom’s unique position within Kenya). Remittance transfers over the mobile phone are immediate, convenient and comparatively inexpensive. In the development context specifically, mobile banking solutions have a human interface, or agents, as they are known as more commonly.

TELECOM-DRIVEN VS BANK-LED M-BANKING MODEL

During the course of my research over the past two years, I had the opportunity to appraise two different types of M-banking models: a telecom-driven model in Uganda and a bank-led model in India. This basic distinction implicates the primary stakeholder that owns the complete operational process, and whose brand is typically dominant (Porteous, 2006). The different types of models also determine who exactly the agent in the system will be, and what entity will select specific individuals as agents. In a telecom-driven model, as in Uganda (and also the massively popular M-Pesa in Kenya), the agent is usually a small shopkeeper who sells airtime (and more often than not, a range of other products), and who is certified as an M-banking agent by a process unique to that particular telecom company. In this case, the telecom company’s brand is dominant. In the bank-led model in India, a Technology Service Provider (or TSP) may become a banking correspondent for the banks (Ghosh & Bajpai, 2012), who then source and recruit their own agents. These agents are similar to the ones observed in Uganda, in that they are usually shopkeepers who sell airtime amongst other products. However, they are certified as agents to handle cash-in/cash-out activities by the TSP directly. Therefore, these agents will be representatives of the TSP and not the bank, although they are still selling the bank’s financial services. Interestingly, in this case the bank’s brand is dominant, although the agents as the TSP representatives must display their brand as well.

BUT WHO DO WE TRUST?

Typically, when agents are recruited (both in Uganda and India), the longevity of their business is taken into account. Therefore, agents are often longstanding members of their immediate communities. Their customers will know them well, sometimes for years. In this case, the customers trust the agents directly, rather than the telecom company or bank, and will therefore be willing to transact with the M-banking solution. In certain cases, customers will even be willing to keep their money on hold with the agents until their transactions are completed at a later time, without any formal receipt. However, in cases where customers are not acquainted with the agent directly, it is highly possible that the telecom company or bank led them to the M-banking service. This can be through direct or indirect marketing techniques, or through referrals where a bank may offload customers directly to the M-banking solution to ease up the traffic at their branches. Therefore in these events, the brand of the telecom company or the bank will impact the decision of a consumer to approach an unknown agent and trust him or her with their precious money.

For one-time financial transactions such as remittances or bill-payments, consumers may test the reliability or trustworthiness of the M-banking solution by remitting money or paying a bill one time. If the transaction goes through, the consumers will begin to trust the system and conduct future transactions. In this case, consumers will be driven to try the M-banking financial service for the first time by the brand associated with the service (MTN in Uganda or SBI in India, for instance), or by the influence of a familiar agent. However, whether or not they continue to trust the system will be governed by the success of that first transaction. On the other hand, for transactions that require a continued relationship with the financial solution such as transactions with formal bank accounts (savings or current) do, the brand of the telecom company or bank will impact the consumer’s decision to sign up and, more importantly, stay invested in the system. The acquaintance of an agent may lead potential customers to sign up for a bank account, but it is unlikely that they will continue to transact with this M-banking solution unless they believe in the brand administering it.

WELL-REGARDED (Telecom or Bank-Institution Brand) NOT WELL-REGARDED (Telecom or Bank-Institution Brand)
WELL-REGARDED (Agent Brand) A potential customer will be willing to perform both one-time transactions (such as remittance) as well as long-term transactions (such as savings) A potential customer will be willing to sign up for the service.

  • For one-time transactions, the new user will test the service by conducting the first transaction with a small amount of currency. If the service obliges, the customer may continue using it.
  • For long-term transactions, the new user will sign up but it is unlikely that they will continue to transact unless they believe in the telecom or bank brand administering the service.
NOT WELL-REGARDED (Agent Brand) A potential customer will sign up and may stay invested in the service on the basis of the faith they have in the telecom company or bank administering the service. It is unlikely that a potential customer will use the service.

  • For one-time transactions, the new user may test the service. If the first transaction is successful, they many continue using it.
  • It is highly unlikely that the customer will keep their money invested in a long-term transaction.

FURTHER READING

  • Porteous, D. 2006. The Enabling Environment for Mobile Banking in Africa. Department for International Development Report.
  • Ghosh, I., and Bajpai, K. 2012. A Case Study on the Business Correspondent Model in India: Technology Service Providers as BCs. World IT Forum (ifip), New Delhi, India.
  • Ghosh, I. 2012. The Mobile Phone as a link to Formal Financial Services: Findings from Uganda. The Fifth International Conference on Information and Communication Technologies and Development (ICTD2012). Atlanta, Georgia USA.
  • Mas, I., and Morawczynski. O. 2009. Designing Mobile Transfer Services: Lessons from M-Pesa. Innovations: Technology, Governance, Globalization, 4, 2, 77-92.

Update from the Field: Quit India demonstration

Posted on August 28, 2012 by Jenna Burrell

Editor’s Note: This is an update from the field by Janaki Srinivasan who is currently researching the fishing industry in Kerala, India and the use (broadly) of tools and technologies ranging from trawlers, nets, and GPS to the mobile phone.  Her project is funded by the Institute for Money, Technology, and Financial Inclusion (IMTFI)

Notes from attending Quit India demonstration by fishworkers in Trivandrum
9/8/2012, 11 am

I read about the fishworkers’ demonstration on several mailing lists. A fisherman in Kollam (James) had also informed me about it. The demonstration was supposed to be held in front of the Secretariat in Trivandrum.

A little past 10.30, I saw 80-100 people, men and women, walking up to a lane by the Secretariat building in Trivandrum. They were chanting slogans and held up blue flags. They formed a circle and a wooden model of a ship was placed at the center. The model had “Foreign Fishing Vessel” painted on its side. Many press photographers attended the event and were busy documenting it with photographs and by talking to people. A fisherman friend told me that the demonstration was aimed primarily to show displeasure at the Central Government’s decision to issue 77 letters of permit to foreign fishing vessels. The permits allowed these vessels to fish in Indian waters. The Kerala Swatantra Malsya Thozhilali federation, an independent trade union of fishworkers in Kerala was organizing this demonstration on “Quit India” day, August 9th, 1942 being the day that the Quit India movement started, telling the British to leave India. Today too, the protestors were asking the foreign vessels to “Quit India.” Such demonstrations were being held in various coastal cities and had been called for by the National Fishworkers Forum, of which the KSMTF was a part.

Why were foreign fishing vessels so unwelcome among these fishworkers, all of them artisanal fishworkers? (i.e., they worked with small boats, not trawlers). As the fishermen and their leaders who spoke at the event explained, foreign fishing vessels were big enough and had enough equipment that they could deplete the waters of fish for the artisanal fishermen. Moreover, because of the nature of the equipment they used, especially the nets, the ecology of the areas they traveled could potentially be drastically affected.

The high point of the demonstration was the burning of the ship model. As the model went up in flames, fishworkers chanted slogans of Inquilab Zindabad (Long Live the Revolution). The women sang revolutionary songs and some of those attending danced around the fire.

  • Recent Posts

    • Scarcity of Space in the Market
    • How to support smallholder and women farmers with ICT4Ag
    • What do RCTs of Market Information Systems actually evaluate?
    • The ‘Myth of Market Price Information’ at the CRS ICT4D conference
    • Chris Foster on ‘Thinking about market information systems’ in Rwanda’s tea sector
  • Recent Comments

    • Archives

      • July 2015
      • June 2015
      • May 2015
      • April 2015
      • September 2014
      • May 2014
      • December 2013
      • April 2013
      • March 2013
      • February 2013
      • January 2013
      • December 2012
      • November 2012
      • October 2012
      • September 2012
      • August 2012
    • Categories

      • Farming
      • Field Notes
      • Fishing
      • Infographics
      • M-Banking
      • Market Information Systems
      • Market Women
      • Other Market Actors
      • Uncategorized
    • Meta

      • Log in
      • Entries feed
      • Comments feed
      • WordPress.org
    • Connect with us:
    • RSS
    • © 2022 A Project at the UC-Berkeley School of Information
    • Powered by WordPress