This is a guest post by Dr Ndunge Kiiti of Houghton College, New York and the GSMA mWomen programme.

Over the past seven months, my colleague Dr. Jane Mutinda from Kenyatta University in Kenya and I have been studying how mobile money services impact poverty reduction in rural Eastern Kenya. So far we’ve seen that Safaricom’s mobile money service M-PESA has proved very popular amongst women’s groups and today I’ll be sharing with you insights into this phenomenon, from the research process which included a workshop. The workshop brought together representatives from the women’s groups with M-PESA staff to share thoughts on the benefits and challenges presented by the service and ways users can improve their experience.

Profiles of the Women’s Groups

Gross inequalities exist between men and women in Kenya. These gaps and inequalities are evident in access and control of resources, economic opportunities and power, and political voice. For example, an estimated 95% of all land holdings in Kenya are owned by men,; while women own only 5% (UNDP & UNIFEM, 2005, p. 11). These challenges have translated into high levels of poverty, mainly concentrated among women in rural areas. According to the Central Bureau of Statistics, the Eastern Province of Kenya is one of the poorest regions of the country. Among the many drivers of poverty in this region is lack of information about socio-economic services, rights and obligations is key and this problem especially affects women.

The 21 women’s groups we studied are working on addressing poverty from social, economic, and psychological perspectives. Currently, all the groups have savings accounts (as a group and many as individuals) and some form of financial investments. Additionally, most of the groups continue using the Merry-Go-Round system, a basic example of what Stuart Rutherford (1999) calls the Rotating Savings and Credit Associations or ROSCAs. These are a form of lottery where members save a fixed amount every period (weekly or monthly, for example) and the total amount saved during a given period is given to one member of the association, either based on need or randomly.

From our research, it is clear that mobile money services are central to the success of these groups. Each of the groups uses M-PESA as their main avenue for transactions, as individuals and groups. As one group member put it, “The use of M-PESA has been extremely beneficial to many people.” Many of the group members expressed that they couldn’t imagine not having access to M-PESA as a service.

Benefits of M-PESA

A key reason we found for the service’s popularity was that M-PESA was the initial service introduced to rural areas. Therefore it already serves a large portion of the population that has no access to banking services and clearly builds on the social ties that exist across urban and rural areas in Kenya.

For the women’s group activities, it was clear that M-PESA assists in facilitating group payments, especially for members who might live away from their groups or be traveling during the monthly meetings. For example, although all the groups have their base in the rural areas, some group members live in urban areas because of family commitments or employment opportunities. M-PESA allows them to still contribute to their group although they are not always physically there. As one group mentioned, “People are able to pay their dues on time even if they are not present.” This efficiency is perceived as essential to group planning. “It enables us to plan….what we want to do with that money and whatever we wanted to do is done.”

M-PESA also assists some of the groups with their microfinance transactions, whether they are purchasing or selling a product for their businesses. In one of the group discussions, this was highlighted, “On the side of purchasing goods, it’s like we have been freed from traveling by vehicles. We just send the money and the goods are delivered to us….you have paid for everything including transport.” This was also mentioned in the context of supporting rural businesses. There was strong support for M-PESA as a service that promotes more economic transactions in the rural areas; thus leading to rural development and arguably, the reduction of poverty.

In addition, from a basic usage standpoint, the women emphasized that M-PESA is convenient, safe, accessible, efficient and affordable. The fact that M-PESA creates opportunities for employment was also viewed as a positive aspect of the service.  However, there were some challenges in relation to their use of the M-PESA services that the women highlighted. The following were most frequently described.

Challenges

• Fraud

Several of the women had lost money to fraud. The most common type of fraud was receiving a call or SMS from an individual who claims they have sent money to your M-PESA account by mistake. They usually request you to send it back to them. One group member explained a personal experience with fraud: “For example, last week I got three SMS messages continuously; same number, one minute between each. They were asking me to confirm that I had received several amounts of money. At the end it said ‘your M-PESA now is eight thousand. And in my phone I knew I had about two thousand. So immediately, I knew ….it was a hoax.”

• Network/Connectivity Problems

In rural areas network reception can create challenges. One group member explained the problem they often face, ‘The network is low, so you are told, “there is no network”…..which means today there is no M-PESA. So you find you wanted to send that money quickly but it can’t go because of the network.’ This seems to be a key problem in very remote areas.

• Cost

The general cost of M-PESA services seemed to be accepted. The cost issue was mainly highlighted because of the high levels of poverty, especially in rural areas. Even though the service is greatly appreciated for its convenience and security, the charge is often viewed as an additional cost that uses resources that could be used elsewhere. One woman noted the additional cost , “If you send money through the M-PESA to the treasurer [of the women’s group], you should send with the money for removing it.”

• Services for Special Populations

Some of the elderly women emphasized that sometimes their main challenge is the inability to read and that often translates to having to give out their personal information, recognizing that it could be used for fraud. This issue was also expressed by the group with members with visual impairments. One of the respondents who lived with sight problems shared her concern: “The phones which are available nowadays, they are not audible, they don’t talk. You can’t operate it in a manner that it can tell you everything, so it’s easy for a person to read for you the wrong money figure that is in the phone account and take a share of what is there.”  They made a request to the M-PESA staff, to advocate and push for the development of more products and services that are friendly to special populations.

• Group Communication Dynamics

The irony of the M-PESA service is that it can impact group communication and interaction both positively and negatively. On one hand, it allows for money to be sent to facilitate planning at meetings, even if a member needs to be absent. On the other hand, as one member put it, “Many people feel that they can fail to attend the group meetings as long as they send the money.” Most groups charge a fee if monthly contributions are sent late. Thus, most group members would be inclined or motivated to send their payments in on time. M-PESA helps facilitate this. However, some groups argued this can perpetuate the lack of meeting attendance, thus, limiting the social aspects of the group meeting and affecting the socio-psychological support that comes from face to face group interactions.

Although there were numerous challenges mentioned, the groups made it clear that the benefits outweighed the disadvantages, summarized by one respondent: “The positives are more than the negatives.”

Check back next week for the second part of this post.

For a more detailed presentation of their study, please visit the IMTFI Website.

Photo Credit: MarineBio

By some accounts tourism is the world’s largest industry, accounting for more than 10% of total employment. Tourism can have a negative impact on the environment by leading to the degradation of habitats and landscapes, depleting natural resources, and generating waste and pollution.

As a response to these concerns, ecotourism has grown in popularity because of its emphasis on being ecologically and socially conscious by raising awareness and support for conservation and local culture. Responsible ecotourism includes programs that minimize the adverse effects of traditional tourism on the natural environment and enhance the cultural integrity of the local people. Ecotourism has great potential for the developing world as communities come together and get involved, enforcing their own standards for sustainability.

So what is ecotourism 2.0? Ecotourism 2.0 seeks to fill the gaps that exist in ineffective organizing structures of ecotour communities. There are three main characteristics of ecotourism 2.0:

1. Engagement and Education – tourism doesn’t have to be passive and there can be a take-home message

2. Social Media – access and communication of information

3. Radical Transparency – clear organization within communities and with their visitors

Social media has thoroughly changed marketing techniques, now “people aggregate themselves around causes and products they believe in and age, sex and other demographic information is more and more irrelevant as this new media environment takes over.” It also allows for easy access to specific information and advice from locals, extending the experience beyond a vacation with updated news and reminders of key concepts.

Let’s look at successful social media campaigns:

Laos – Ecotourism Laos‘s website has Google Groups for donor organizations, government agencies, NGOs and the private sector to exchange information on current projects and issues relating to ecotourism development in Laos. The website allows for transparency and easy access to information and recommendation for visitors.

India – Ecotourismkeralam.org provides access to information, specifically contact information for visitors to Kerala, India. Kerala is considered one of India’s most unspoiled corners prone to forest clearing.

Kenya – Eco Tourism Kenya is a multifaceted forum with updates and links to everything related to sustainable tourism.

Lebanon – This Baldati community is an ecotourism e-community for public announcements in the field.

Photo Credit: TechCentral

Within the last month, there have been multiple new examples of mobile phones being leveraged to expand financial services in developing nations. With the popularity and quick success of M-PESA in Kenya, there was a push to copy the model in other developing countries. But it has been realized that the M-PESA model cannot be simply duplicated. The new mobile money products and services need to focus on solving a customer’s pain (or perceived pain) within the regional context (competition, policy environment, culture, infrastructure, etc). The examples below show how innovation in the market is occurring to meet the needs of customers. Mobile Network Operators (MNOs) are seeing the benefits of providing an expanded set of value-added services to differentiate themselves in the market. In a recent TECHTalk  at USAID with Pamela Riley from Abt Associates, she explained that MNOs are most focused on increasing and keeping their customers. With greater competition in the mobile network market, the ability to create more value to a MNO’s service keeps the customers from jumping from one provider to another (usually easier because one MNO’s SIM card can be easily switched out for another’s). The MNOs’ desire to increase revenue creates an incentive for them to implement innovative solutions based on the needs of their customers but also within the region’s entire context.

Below are a few recent examples of innovation in the mobile money space:

Mobile Banking

RedCloud Technology recently completed Bolivia’s first mobile money platform. The product, Nube Roja, was created from a $1.2 million investment from BlueOrchard, CONFIE (Corporación de Fomento a Iniciativas Económicas S.L.), PROFIN (Fundación para el Desarrollo Productivo y Financiero), Iceni Mobile, and RedCloud. The goal of the product is to provide access to financial services to roughly 6.5 million people in Bolivia who do not have a bank account. A pilot of the service will begin in the near future with customers being able to cash in, cash out, top up their airtime, transfer money person-to-person, and send remittances.

A newly formed partnership between First National Bank (FNB) and retail store PEP allows customers in South Africa to use FNB’s eWallet for banking services at the retail store. As long as the individual has a bar-coded South African ID, he/she can deposit, withdraw, send, make payments, and purchase goods at any PEP store in South Africa. In the past, only FNB customers could use the product. But with this partnership, FNB is looking to reach the unbanked in the country. Partnering with PEP expands FNB financial services to 1,200 stores and gives greater access to those who have a mobile phone.

As a part of a strategy to expand financial services further into the rural areas of Mexico, the National Savings Bank and Financial Services (Bansefi) is going to use mobile technologies through the implementation of the Program of Technical Assistance to Rural Microfinance (Patmir). Their goal is to have over 15% of their new partners and customers be served with low-cost mobile technology. Bansefi will be hiring a consulting firm to provide technical assistance with the implementation of new technologies, innovations, and best practices.

Money Transfer Services

In partnership with one of the leading MNOs in India (BSNL), the Indian Post Office has begun its own mobile money service.  The service allows money be transferred via text message and utilizes the physical post offices to act as cash in/cash out locations. It works by the sender providing the post office with the receiver’s information (number and address) along with the amount to be sent. Once the cash is deposited, both the sender and receiver are text messaged a unique code by the Post Office. In order to withdraw the money, the receiver shows the code to the Post Office.  There is a service charge of 5% and is available to individuals across all networks.

Airtel has plans to establish mobile money transfer services in Kenya and Tanzania as it has already done in Uganda. The goal of the new services, as stated by Michael Okwiri, Vice President of Corporate Communivation at Airtel Africa, is eventually create a cross-border money transfer service between the three countries.

Western Union and Telma, a Malagasy telecomm company, have partnered to start an international mobile money transfer service. The new service allows citizens to transfer money via their mobile phones by using Western Union’s international transfer service. By combining Telma’s mobile money service (MVola) and Western Union’s service, individuals can receive money transfers from abroad via their mobile phone. The transfer will go directly into their MVola account. At this point, it is only a one-way service as Malagasy citizens can not send transfers outside the country. MVola, like other mobile money services, allows customers to purchase goods, make payments, and deposit/withdraw money.

ATM

As a part of Airtel’s new mobile money platform in Uganda, customers will be able to process transactions at ATMs. This includes paying bills, accessing their bank accounts, and withdrawing Airtel money using ATMs located country-wide. This service was made possible via partnerships with banks which include Standard Chartered, Post Bank, KCB, and Diamond Trust Centenary Bank.

Credit-Worthiness

A Cambridge start-up has created software in order to help determine an individual’s credit risk by looking at how the person uses their mobile phone. Cignifi has received $2 million in funding after piloting the product last year in Brazil. The software looks at multiple data points in order to further understand one’s lifestyle. It creates a score similar to the FICO score used in the United States. Since many developing countries do not have credit bureaus or limited ones, it is more difficult to calculate the credit risk of an individual person. This is innovative way to understand the riskiness of an potential borrower.

A panel on “Mobile Agriculture: The Market Opportunity” will be one of the highlights at the upcoming Mobile World Congress 2012 scheduled for Barcelona, Spain at the end of this month.

This intensive panel session will cover issues on the immediate opportunities for the mobile industry to launch commercially driven services for farmers, and the emerging best practices and insights from existing service providers on overcoming challenges and launching Agricultural Value Added Services (Agri VAS). It will showcase the market opportunity for Agri VAS in emerging markets, and expected to be patronized by mobile network operators (MNOs), VAS providers, content providers, agricultural organizations, NGOs, development practitioners and academics interested in the opportunity to develop innovative new services.

The panel will include experts and thought leaders from the mobile agriculture industry. Below is the event information.

Event: Mobile Agriculture: The Market Opportunity

Date: Tuesday 28th February 2012

Time: 17.30- 18.30 CET

Venue: GSMA Seminar Theatre, Hall 2.1, Fira Montjuïc, Barcelona, Spain

Mobile technologies are enhancing access to information across the world and impacting lives in remote rural communities. There are nearly six billion mobile subscriptions in the world today. Four out of five new connections are happening in the developing world. Yet these markets suffer from numerous challenges in the agricultural sector, from low yield amongst smallholder farmers to supply chain inefficiencies.

The rural sector represents the largest customer base in emerging markets and is a significant growth area for the mobile industry. In response to this opportunity, the GSMA launched the mFarmer Initiative in 2011 to support mobile operators and agricultural organizations in launching commercially viable mobile information services for farmers. The GSMA mAgri Program identifies opportunities where mobile can have the most impact to mitigate these problems.

Mobile World Congress 2012 will celebrate the current state of mobile and offer a glimpse into where mobile has the potential to go next. For more information and to register for Mobile World Congress 2012, please click here. To reserve your place at the Mobile Agriculture panel event please contact the GSMA mAgri program at mAgri@gsm.org.

For more information on the GSMA mAgri Program, please visit: https://www.gsma.com/magri/