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«bath papers in interna onal development and well-being ISSN 2040-3151 Compe ng visions of financial inclusion in Kenya: The ri revealed by mobile ...»

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Shipton’s analysis shows that exchanges that appear to be open-ended may produce obligations which are discharged in a very different form and hence it is not surprising that justifications for gifts were rarely given, although one young man specifically explained a gift to his sister as a gesture in response to her having accommodated his wife for some time (902/1). The example of a woman who reported that her brother had helped her clear her daughter’s final year school fees balance so that she could get her certificate, is a case in point (907/2). The brother who was a policeman had small children of his own, so that this expenditure could arguably have been put in a child savings account for his own children’s future education. As Shipton (2007) points out, it is likely that this daughter too will feel the need to reciprocate in some way when she is in a position to do so in the future. It appears that friends, family and other relatives are in both borrowing and more open-ended exchange relationships. Indeed, an example of the difficulties of negotiating boundaries was where a woman reported sending her sister-in-law Kshs5000 to buy stock in her second hand clothes business which had not been repaid and which she felt she could not “insist” on receiving back the money because the sister-in-law “is still young and views [me] as an elder sister” (816/2), suggesting the complexity of these exchanges within familial relationships.

The majority of users withdrew funds completely after receiving a transfer (see also Stuart and Cohen 2011). In this sample, some 34% (71) of those registered with a money transfer service reported holding a balance on their phone. The most common reason was safety (39%): by putting money in the phone “you can walk with the money and you don’t have it” (320/2) and hence this was not co-terminous with a place to ‘save’ in the sense of building up balances but was more related to being able to move around with funds (an e-wallet). These reasons are followed by having funds to send to others when needed (36%). If these responses are viewed alongside having funds for unexpected needs (9%) and financial flexibility (10%)10, this indicates a need for funds to be on hand to deal with the unexpected whether for oneself or others and that keeping funds in the phone is therefore a safe and easy way to do this and was supported

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by the qualitative interviews.11 In turn this underlines holding a reserve that was evident in local language terminology for saving discussed above, and hence indeed the ability to give ‘help’ or ‘assistance’. This evidence suggests that keeping money in an MMT account needs careful interpretation, especially where surveys ask about ‘saving’. Holding money for convenience, safety or an emergency reserve are valuable features that respondents feel the service offers but this does not necessarily suggest that they see it as a place in which it is useful for “keeping” or “pulling” money together.

4.3 Informal financial groups 51% of the samples were using financial groups and the reasons given clustered around four main themes. First, is the management of liquidity in terms of their ability to get lump sums, which might also be specifically directed towards buying household and farm goods or other investments, and having access to liquidity when it is needed. Lump sums or pulling resources together is achieved by access to loans in ASCAs – a feature that some men in particular underlined. Emphasising that “someone who makes little money like me cannot qualify for a bank loan” (504/1) which requires on-going deposits and withdrawals and by contrast the flexibility of borrowing from a group even pertains to borrowing outside meetings signalling it as an accessible source of liquidity. 47% of ASCA members had a loan outstanding – five times the proportion of those in banks.

The effect of these features was exemplified by one woman who had taken a bank loan for business stock and repaid, and then stopped using her bank account. She had then joined two NGO trained Group Savings and Loan (GSL) groups that operate as ASCAs. She explained that the groups are near, she can get money whenever she wants – so signalling the ease of access to loans - and they also share ideas, and that “In these days if one is not in any group she cannot survive”! …“instead of staying in the house alone the group helps solve your problems” (620/2).

Joining a second group had given her another place to borrow and she explained how she had “rushed” to the group chairlady the previous week to take a loan for the child to return to school and that the loan would be reported to the group meeting the following week.

The second theme is socializing with friends and others, which also links to exchange of ideas, advice and guidance which were also valued. Third is the way groups enable safe saving and support the discipline and commitment of savings: “Groups are good because if I leave the money in the house I will use it on things and never get a lump sum to do something good” (112/2); “The groups help a lot because no one is self-reliant” and “encourage [me] to save” (311/1). However, groups are not without their problems with the main problem being failure to The responses found here for ‘saving’ for safety and emergencies are of a similar order to those reported by Jack and Suri (2010).11 They found that 81% were holding funds on their phone by their own definition of savings as holding funds for 24 hours. However, 26% reported using it because of safety and 22% for emergency. They report the highest proportion - 41% of users - reporting using it because of ‘ease’ of saving.

13 | P a g e Bath Papers in International Development and Well-Being Paper Number 30 contribute; members pulling out; death of members and non-co-operation. Relatively few cases of poor administration, dishonesty and misuse were reported.12 The fourth theme is assistance at times of crisis and this is particularly financial but also operates in the form of social assistance. While the rigidity of ROSCAs is often applauded and seen as a feature that enables discipline and commitment in savings (Gugerty 2007), the way they are in fact used allows for much more flexibility. There are various ways this is achieved. In ROSCAs this flexibility may be offered by the group as a whole “in case of emergency one can be allowed to get a payout even if the person’s turn is still far from there” (114/2) or “negotiate with your friends” (212/2) enabling you to “trade places” (214/2) making it “pretty flexible” (914/1).

Guyer advocates a focus on language in order to gain insight into actual practices (2004). The terminology for groups differs considerably across locations and even within particular language areas, but in general you “contribute” to a group – iruta (Kikuyu); egango (Gusii) – and this is not considered saving as the funds in the group are not exclusively yours. ROSCA payouts are often considered as “winning” kūrea gitati (Kikuyu); kusinda (Kikamba) in relation to voting or lotteries over who will take the funds even though one will get it at some point in the cycle. ASCA loans are an ngumbato or literally an “embrace” in Kikuyu; and funds in the group are only ‘savings’ once they are withdrawn. Hence, funds contributed to groups do not necessarily engage members with a strong sense of individualistic accumulation or ‘saving’ since they are not clearly one’s own and in ROSCAs must be won or in an ASCA are an ‘embrace’ even if interest is paid.

This evidence points to the strong social dimensions of the way groups operate. They enable the development of social networks which render support in times of need through both the welfare function that many also have and the flexibility and scope for access to resources and liquidity and represent relationships of equality in the exchange of resources. Shipton (2007:116) also points out that these groups are “a way of accumulating capital without seeming selfish to other needy kin or neighbours. Every contribution made is on member’s behalf as well as one’s own”.

The circulation of funds develops social relationships that are negotiable and allow claims to be made and heard by others rather than putting resources in places where exclusive control is established, so offering a qualitatively different type of service to those of banks.

4.4 Banks Of the 36% using a bank, 64% reported putting money in the account at least monthly, and a relatively low proportion of these were automatic monthly payments (10%) reflecting the low proportion of salaried employees in the sample. As a result of shifts to transaction based charging since 2005 in the banking system (see (Stone, et al. 2010)), many saw accounts as now available to “the common man”. Qualitative data gives us greater insight into the nature of their use, with more reporting opening their bank account for receiving payments than making savings. Only 7 of the 31 who had opened an account in the last five years, cited saving as a motivation while almost half (14) cited their reasons as related to the need to be able to receive Since these questions were asked of groups which respondents were currently in, there is a “survivor” bias in these responses, since groups with serious problems have usually collapsed.

14 | P a g e Competing visions of financial inclusion in Kenya: the rift revealed by mobile money transfer Johnson payments either salaries or payments related to business, temporary labour contracts, or for example to clear cheques, many of these being infrequent or temporary uses.

This evidence of a strong payments rather than ‘saving’ rationale is further illuminated by those who reported that their non-use of bank accounts because “the money I make is very little and there is nothing to be taken to the bank” (704/1); or the lack of a permanent job, low income or

that there is nothing remaining after expenses have been dealt with to be taken to the bank. Or:

“when I get money, if I do not have anything to do I take the funds to the account” (914/1).

Such statements reveal two points. First, that banks are not perceived as a means through which money management for daily purposes can take place, rather that they are a place to put residual funds to be “saved” or once a sufficient lump sum has been accumulated. The aspiration to be able to have such a lump sum is strong but hard to achieve given the demands of daily expenditure. Second, and implied in this, is that the amount to be taken to the bank has to be an amount that is worth saving.

The terminology used for saving in local languages also offers some insights here. The terminology for ‘saving’ is more akin to terms which translate as “keeping money” - kuiga mbeca in Kikuyu, or “pulling together” – okobekarania in Gusii, or kumbani mbesa in Kikamba. There are also terms for a reserve of money or resources which is something to fall back on in an emergency. In Kikuyu the term is muthithu which is used in the case of utūkū mūru – literally a bad or evil night - and can be in the form of food, livestock or a piece of land, or a reserve which is in the house or bank. This is not something that is ‘saving’: it is something someone needs to have and is equivalent to ekagancha in Gusii or kinandu in Kikamba. ‘Keeping’ money for a purpose has a connotation of surplus once expenses and the fall back reserve are taken care of.

When funds are “kept” or “pulled together and set aside” in these ways they cannot easily be used for something else and there is a restriction on accessing them for other purposes unless in very grave circumstances. Indeed it might be preferred to create a debt rather than use these funds. Funds may be accumulated for the future or even for inheritance by children, the fruits of which are not expected to be seen within a lifetime and this can particularly take the form of purchasing land, plots or shares in land companies. Thus when people say that they are not able to save they mean that they are not able to keep money for such accumulation purposes beyond their everyday needs and the response that people cannot ‘save’ in the bank refers to this.

The aspiration to get loans has become greater in recent years. Indeed bill boards are constantly advertising personal loans in contrast to a perspective before 2003 that borrowing from banks was like trying to “milk an elephant” (Johnson 2004) – but this is largely targeted at a salaried market where a “check off” at source system means repayment is relatively secure and in which there is acute competition between banks. Bank managers indicated that access to a “facility” was important to people and the majority of enquiries about account opening related to the potential to get loans: “people expect to get financial support from the bank…this is their main reason for banking” (Manager, Kitui) and “people want to bank where they can get a facility ….(it) has to be a win-win situation – you have their deposit…if I have some eventualities can you 15 | P a g e Bath Papers in International Development and Well-Being Paper Number 30 help me out? …can you trust me with your 100,000? How can you be able to lift me from where I am and I move a step higher?” (Manager, Karatina). But access for the non-salaried is hard and can turn to disillusion when requirements cannot be met or amounts qualified for are small.

Among our survey sample 9% of bank account holders had outstanding loans, a figure that is lower than the 16% of those with accounts in the FinAccess 2009 sample. In our in-depth sample seven had taken bank loans and four were on-going cases, with the main experience reported being the difficulties of managing them. This evidence regarding loans signals a mismatch between the expectations people have of banks and what they are in fact able to offer.

5 Explaining financial practices: Social relations and negotiability This evidence exposes the dimensions of social relations underlying the financial practices which produce headline levels of financial service use, and I now consider these through the lens of Graeber’s threefold social relations of basic sociability, exchange and hierarchy and Berry’s insight into the concept of negotiability.

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