In Western Kenya, “Sambaza” is both a marketing slogan and means for despair. It means “to spread.” Vodafone-owned Safaricom, the dominant mobile provider in Kenya, uses it as a brand name for a service that allows customers to transfer airtime to each other. According to a new study (pdf) funded by the Institute for Money, Technology and Financial Inclusion (IMFTI), the word has also come to refer to the way money in a mobile account slips away, drip by drip, as friends and family ask for favors.
People who work in economic development use the term “unbanked” to describe the roughly one in three people in the world who don’t have a formal bank account. According to the World Bank, the unbanked include almost 60 percent of adults in developing countries and 77 percent of adults making less than $2 a day. In richer countries, banks provide a source of credit and a means of saving to smooth out earnings and accumulate wealth. The World Bank sees bank accounts on mobile phones as a way to give these things to the rural poor, too.
Adopting mobile money, however, is not as straightforward as substituting a phone account for cash in a jar. Developing countries don’t necessarily have a cash economy to begin with. Cash, where it exists, is freighted with social meaning. People who have never had access to banks develop credit and income smoothing without them, through social custom and family ties. A person in Kenya with a brand-new mobile banking account can’t just immediately begin a personal credit history and build equity, the way a young adult would expect to in the U.S. or Europe. You can’t suddenly stop financing through your family or abandon the social rituals attached to gifts, just because you’ve bought a phone.
A paper published in March by the Consultative Group to Assist the Poor, a nonprofit group, looked at text and call data in three African countries to figure out what drives adoption of mobile money. (Growth, the paper noted, “has not been as fast as anticipated.”) The authors discovered a gap between rich and poor. First, you’re more likely to use mobile money if you’re more likely to make calls and send texts. That is, you’re more likely to use mobile money if you’re spending money already anyway. Second, people with more contacts who have mobile money accounts are more likely to have accounts themselves. This is true in each country, regardless of how developed the mobile money market is.
So data show that, even within poorer countries, the poor lag the rich in mobile money adoption. This leaves the development community with a pretty basic problem: It can’t help the poor with an innovation if the poor aren’t adopting it. In a 2012 paper, also funded by the IMFTI, Woldmariam Mesfin conducted extensive interviews on payments within a small farming community of Amhara and Oromo in Ethiopia. Mesfin takes an anthropologist’s approach and describes payments as either a commodity or a gift exchange, with different social expectations for each. Payments among equals also carry different consequences than those to a person of different social status. Not every Birr—Ethiopia’s currency—is just a Birr.
The Ethiopians Mesfin spent time with insure for the cost of funerals, illness, and fire through a mutual savings club called an edir. The edir meets monthly, registering contributions with written entries in a ledger, signed by a chairperson. And it creates a credit history; abuse or failure to contribute regularly can get someone blacklisted at other edirs in the area. Outside the edir, distant relatives and members of the community are expected to offer money for weddings and funerals. This money is given and received with certain, ritualized language and is treated as a loan, not a gift. Sometimes it is physically held in a separate place, to distinguish it from household accounts.
Mesfin leaves mobile money firms with an explicit message: They are not designing products for individuals, but for communities. A banking application might need a digital book, to record contributions from different members of a mutual savings group. Or it might need to reserve some money in a separate account, to be paid back to someone else over time. If you grow up in a group that establishes social credit and insurance, you can’t just start keeping virtual cash in your own account and call it your net worth. Bits and pieces of your net worth have meaning. Cash is not necessarily a commodity.
(It’s worth noting that, in an article for this magazine two years ago, I described the advent of mobile savings and got this very wrong.)
The four authors who discovered the novel use of the word “Sambaza” in another paper for IMFTI spent the summer of 2012 among families in Western Kenya. The authors describe mobile money in these families as both an economic and a social tool. Sending money over the phone is a step down a continuum that starts with sending gifts of airtime. Male students were expected to send airtime as a first step in a flirtation, for example. Mobile money offered the ability to send a gift to a wedding or funeral without the expense of travel, but it also created tension. A mobile remittance is a poor substitute for the physical ritual of appearing in person and handing over cash.
The “Sambaza” paper explains that mobile money is both helpful and disruptive. Men, who in the past had been dismissive of the social gatherings around mutual savings clubs, are now forming mutual savings clubs themselves over mobile phones, assessing credit through shared bonds such as trade—among bus drivers, for example. But mobile money strengthens traditionally weak bonds among what anthropologists call “uterine kinship.” A wife can stay attached to her own birth family by helping with school fees, for example.
“When I commented to one lady that she did not name her husband as an e-money contact,” one author writes, “she clucked in annoyance—and pointed out her farm and chickens, entrusted to her by her mother-in-law.” Property, real value, passes from father to son. Mobile money may not be the hoped-for story of empowerment for women in Western Kenya, the authors point out, but rather a coping strategy for maintaining ties to the home she was born to.
And some mobile money account holders report avoiding their phone altogether. From some people, no call comes without a request for money. “Nowhere to hide,” the authors heard, and “it is a curse more than a blessing.” This is a familiar problem to any parent with a child in college; every society has some level of ritual and social expectation around cash. But actual experience with mobile money in Kenya, where the service is most widespread, leaves hopeful development economists with a problem. There can be no mobile economy until cash loses some of its ritual social meaning. This happens with economic opportunity—the economic opportunity that mobile money is supposed to help provide.