Welcome to CENFACS’ Online Diary!
24 October 2018
Post No. 62
The Week’s Contents
• FACS, Issue no. 61, Autumn 2018 – Key Highlights
• A la une Campaign with Marine Technology
• Making Memorable Difference with African Oral History
… and much more!
Key Messages from the Week’s Contents
~ FACS, Issue no. 61, Autumn 2018 – Key Highlights
Making the Impacts of Mobile Money and Financial Digital Inclusion on Poverty Reduction in Africa Clearer
In the abstract of this Issue which we released last month, we argued that the purpose of this Issue was not to demonstrate the link between mobile money and digital financial inclusion on the one hand, and poverty reduction on the other. We acknowledged that there is a body of works and evidences that suggests that mobile money and digital financial inclusion have an impact on poverty reduction.
The purpose of this Issue is to make this impact clearer than what it has been argued so far; clearer in quantity and quality in terms of the number of people who have been lifted out poverty through mobile money and digital financial inclusion.
So, the 61st issue of FACS is a step forward in highlighting and including two important points regarding the contribution of mobile money and digital financial inclusion to poverty reduction.
The first point is about capturing the effects and impacts of mobile money and digital financial inclusion on poverty reduction.
The second point developed in the 61st issue concerns the successfulness of mobile money and digital financial inclusion as models for poverty relief.
Under the Main Development of this post, we have given the Key Highlights of this Issue
~ Autumn Leaves of Action to Upkeep the Nature in Existence (A la une): Marine Technology and Poverty Reduction
The third themed area of our work under A la une campaign is Marine Technology. In this third piece of work, we are dealing with the benefits of sharing marine technology to meet the common challenge of poverty. This area of work falls under CENFACS’ UK and Africa Skills Sharing and Development Programme (UKASSD). For more on UK-Africa Skills Sharing and Development Programme, contact CENFACS.
Marine Technology is also part of sharing economy that can be applied to international development sector. The sharing economy in this context means that it is possible to share knowledge and skills related to marine science and industry to meet the challenge of marine economy.
So, sharing economy and marine technology need to respond to the needs of Africa in marine engineering and naval infrastructure. It is the need of forming engineers, technologists, policy makers and educators in marine science and technology in Africa. This type of sharing knowledge and skills can contribute not only to the upkeep of the natural life in the seas and oceans, but also to the reduction of poverty in Africa.
In the context of UKASSD, the exchange of skills and the facilitation of acquisition of marine technologies for Africa-based Organisations working on marine issues can help to make further steps in reducing coastal and marine poverty.
~ Making Memorable Difference Project: African Oral History
This week is as well of our two days of historical study, analysis and skills recognition and celebration of the legacies left by Africans in the Oral History in Africa. We are searching on Africa’s Oral History.
27 October 2018 will be our Value Day while 28 October 2018 will be our Legacies and Gifts Day about African Oral History. Both the Value Day and the Legacies and Gifts Day are an opportunity to undertake the re-reading of Africa’s Oral History.
To engage with this year’s Making Memorable Difference theme and or support this project, please contact CENFACS on this site.
Extra News: Art and Design for Poverty Relief and Sustainable Development
As part of Art and Design Project for poverty relief and sustainable development, we are asking supporters to illustrate their ideas of Africa’s Oral History into artwork. You can post your artwork related to Africa’s Oral History to CENFACS to share and make memorable difference in your own way.
Main Development from the Week’s Contents
Below are the Key Contents making the 61st Issue of FACS.
Mobile money accounts versus traditional bank accounts in relation to poverty reduction (Page 2 of FACS)
The main message is that because of the traditional model of bank accounts (which is profit-driven oriented model), it offers limited or less scope for poverty relief. Poor people are often excluded from many types of bank accounts and banks’ financial products; especially low income unbanked or underbanked people. This is despite the fact that banks have a huge reach access to funding and data, as well as a pool of financial and economic knowledge and expertise in the sector. Sometimes, their terms and conditions systematically or virtually exclude the poor. This is even strong in the world where they tend to be multinational and less and less local.
There are social business banks (or banks dedicated to serve the poor) such as Grameen Bank or village bank in Bangladesh created by the Nobel Peace Prize winner Muhammad Yunus (1). However, the general pattern of the classical banking model still follows the old capitalist route and philosophy.
The model of mobile money may not be the perfect for the poor, but it does exactly the opposite of what the banks do by accessing the poor and going where poverty is. This is one of the reasons that mobile money account is growing faster in places like Sub-Saharan Africa and other parts of the developing world than traditional banking. However the impact of mobile money is still to be clearly quantified and qualified in terms of reducing poverty, of meeting basic life-sustaining needs of health, education, food, shelter, environment and skills development.
Mobile money and engendered digital financial inclusion (Page 3 of FACS)
The question which one needs to ask within this article is how best to promote mobile money in order to reduce both gender poverty and digital financial exclusion?
The answer to this question can be found in many areas. In the context of this communication, it is about closing the gender gap in mobile money and ending digital financial exclusion in gender. Mobile money accounts are reaching both men and women in Africa and elsewhere. However, most of studies and experiences suggest that these gains have been uneven where men are more mobile money account owners/holders than women in Africa. To reduce gender poverty and engendered digital financial exclusion, gender gap in mobile money accounts as well as exclusion in digital financial matters need to be addressed where they appear.
Engaging Africa-based Sister Organisations (ASOs) with the link between digital mobile money and poverty reduction (Page 3 of FACS)
Our work with ASOs goes to the core argument about the impact and effect of mobile money on poverty. We are asking ASOs, especially those who run digital mobile money programmes and projects to make sure in extracting or measuring the outcomes and getting the impacts of digital mobile money on poverty reduction.
To do that it implies differentiating data about the opening of mobile money accounts, the running and capturing of its effect of this account on poverty. This leads to monitoring and evaluation of the programmes and projects with the outcomes or better impacts about poverty reduction as central focus or goal.
In practical terms, it is dawn to our ASOs to check whether or not digital mobile money initiatives are meeting the life-sustaining needs of education, environmental protection, health, sanitation, food, shelter etc. Using the concept of multi-dimensional of poverty, it is also necessary even compulsory to check that mobile money is tackling multiple dimensions of poverty such as green poverty, income poverty consumption poverty, energy poverty, gender poverty, digital poverty etc.
It is in this way of engaging ASOs that digital mobile money programmes and projects will be rewarded and remembered as truly models for poverty reduction and sustainable development, not an economy that flourishes in the volume of business transactions and deals concluded.
Link between digital financial inclusion and poverty relief (Page 4 of FACS)
The main aim of this piece of work is to try to look at how digital financial inclusion can be a spur to poverty reduction.
Before looking at it, let’s see what digital financial inclusion is about. According to the World Bank (2),
‘Digital financial inclusion involves the deployment of the cost-saving digital means to reach currently financially excluded and underserved populations with a range of formal financial services suited to their needs that are responsibly delivered at a cost affordable to customers and sustainable for providers’.
Developing digital financial instruments or tools, services and institutions not only accessible by the poor but dealing with poverty, can lead to the reduction of poverty and the enhancement of the process of sustainable development for all. In this respect, there could be a causal link or correlation between digital financial inclusion and poverty reduction.
To assert such relationship between two variables, perhaps some quantitative studies (like econometric tests) need to be conducted. However, in the limited context of this newsletter and in the interest of our readers/users, we can only simply say to them there could be a link between digital financial inclusion of poor and reduction of the state of having no money and no material possessions in the digital era.
(1) Muhammad Yunus with Karl Weber (2010), Building Social Business: The New kind of Capitalism that Serves Humanity’s Most Pressing Needs, Public Affairs, New York
Projets d’inclusion financière numérique et de paiement mobile pour la réduction de la pauvreté en Afrique (Page 5 & 6 of FACS)
La réduction de la pauvreté passe par plusieurs moyens et stratégies. Parmi ces moyens et stratégies, il y a le paiement mobile et l’inclusion financière numérique. Dans le cadre de cet article, on va concevoir le paiement mobile comme moyen ou tactique de réduction de la pauvreté d’une part, et de l’autre l’inclusion financière numérique comme stratégie de réduction de la pauvreté.
Le paiement mobile en tant que tactique ou moyen de réduction de la pauvreté
Depuis que la technologie de paiement or argent mobile a fait surface, elle a fait ses preuves en permettant et en facilitant le transfert des fonds et le paiement des services et produits à distance sans recourir à l’argent en espèces, aux chèques bancaires et à la carte de crédit. Est-ce que cela suffit pour d’aucuns argumentent que l’argent ou le paiement mobile est un moyen de réduction de la pauvreté?
La réduction de la pauvreté est une oeuvre très complexe qui demande du temps. On peut avoir des signaux indiquant qu’avec l’usage de l’argent mobile, les pauvres sont en train de remplir certains de leurs besoins de première nécessité tels que ceux de manger, dormir, se vêtir, se soigner, lire et apprendre etc. Avec l’utilisation de l’argent mobile, ils peuvent intégrer les systèmes financiers et économiques même s’ils restent à la périphérie de ces systèmes. De ce point de vue, l’argent ou le paiement mobile est un art ou une tactique pour combattre la pauvreté, car il permet d’atteindre de bons résultats et parfois des buts finaux. Mais, combattre la pauvreté, ce n’est pas seulement un art ou moyen. C’est aussi un problème de stratégie.
L’inclusion financière numérique en tant que stratégie de réduction de la pauvreté
Des dispositifs et travaux de vulgarisation et d’insertion de toutes les couches de populations à bénéficier des atouts et nouveautés des instruments ou produits financiers et numériques (c’est à dire du développement financier et numérique) dans le sens d’une conduite générale peuvent avoir des effets sur la réduction de la pauvreté. De ce point de vue, l’inclusion financière et numérique peut aider les pauvres à éliminer la pauvreté et la précarité dans lesquelles ils vivent. Cela permet aussi bien leur intégration financière et numérique au sein du système financier et numérique nouvellement développé que leur épanouissement.
A travers cette inclusion ou stratégie, ils seront capables d’apprendre et de devenir des lettrés financiers et du numérique. Ils seront ainsi à même de lire la littérature financière et d’acquérir des compétences numériques. Cela fera en sorte qu’ils seront mieux armés pour développer des capacités et compétences indispensables à l’affrontement et à la maîtrise des crises actuelles et futures de pauvreté au sein de leurs sociétés et de protéger leurs enfants afin qu’ils ne retombent pas dans une pauvreté générationnelle. Et comme l’a dit Jacques Attali (3) dans son ouvrage paru récemment dont le titre est ‘Comment nous protéger des prochaines crises?’:
‘Pour agir dans l’intérêt des vivants, il faut d’abord se préoccuper de ceux qui vivront demain. Tel est le secret de la maitrise de toutes les crises à venir’.
L’inclusion financière numérique en tant que stratégie de réduction de la pauvreté peut permettre non seulement de donner des moyens pour combattre la pauvreté aujourd’hui, mais aussi elle peut fournir la conduite générale à mener pour éviter des crises futures de pauvreté ou encore les résoudre quand elles apparaissent pour les générations d’avenir.
(3) Jacques Attali (2018), Comment nous protéger des prochaines crises? Edition Fayard, Paris
Mobile-enabled insurance and savings services to help reduce poverty (Page 7 of FACS)
The matter discussed here is mobile-enabled micro insurance with bundled products like policies related to life insurance and personal cover. These policies should be designed to meet as well as serve the most pressing needs of poor mobile money account owners.
The cover models, products and collections need to be adapted to the conditions and circumstances of all types of customers not only to the business model. It is pointless to state that marketing (whether digital or non digital) is about what customers want. Whether it is about a freemium or premium or loyalty-based insurance; there is still a problem of insurance adaptable to poverty.
The same issue can be raised in a different way with savings services to help reduce poverty. Do poor people who have access to mobile money services have the opportunity to raise their savings ability? Savings through mobile money accounts can be used to reduce poverty in the future instead of using credit. However, are poor people in Africa for example able to save enough on the mobile money accounts? It is not only the question of ability. Perhaps, they may need to be educated about the raison d’être of savings or financial protection generally.
Digital mobile money markets and sustainable development for the poor in remote areas (Page 8 of FACS)
What is at stake here is the comparison of the mobile money market size and growth rate in Africa to the enhancement of sustainable development for the poor in remote areas of Africa.
To make such comparison, it is useful to define mobile money. The World Remit (4) defines it as
‘an electronic wallet service, available in many countries, allowing users to store, send, and receive money using mobile phone’.
When there are demand of and supply to this electronic wallet service, it then becomes a market with a price to pay.
We also need to understand what sustainable development is. According to the World Commission on Environment and Development (5), sustainable development is
‘development that meets the needs of the present without compromising the ability of future generations to meet their own needs’ (Brundtland, 1987)
From these definitions, what we are interested in is the extent to which the size and growth of mobile money market in Africa reflect the rate of improvement in sustainable development. We can make an assumption that the more the demand and supply of digital mobile money markets grow, the more our children or future generations would be able to meet their own needs.
Meeting the financial needs of the poor through cash digitalisation (Page 9 of FACS)
Digitalisation of cash or digital payments (such as contactless card payments) is growing in many places including Africa. It is not an accident of travel to see them growing. This growth could mean they are meeting tangible financial needs from their users. Despite that, there are still pending issues regarding the digital payment world, issues that need to be addressed for the poor.
- Information to protect against financial scams and hacks
- Educate and build confidence of the poor about the notion of insurance (or financial protection) in their mindset
- Plan for uncertainty and unexpected situations
- Lack of basic technologies such as a phone
- How to qualify for borrowing? Etc.
Supporting poor people through specific projects to meet the above financial needs not only help to access digital payments but also it empowers them.
(5) Brundtland et al. (1987), Our Common Future, World Commission on Environment and Development (The Brundtland Report), Oxford University Press, London
Mobile money services and eligibility criteria for the poor and the most vulnerable groups (Page 9 of FACS)
Poverty is more than just about living below the international poverty line, the lack of income, of food, of adequate consumption, of energy, of suitable housing etc. Being constantly refused to access any type of services because you do not meet the eligibility criteria while you are entitled to those services, it is a sign of poverty in itself.
Amongst these poor and vulnerable people and groups who may face exclusion, we can mention the following: homeless, internally and externally displaced people, unemployed, women, people who lost all the belongings because of wars and environment disaster, ethnic minority groups, unbanked and underbanked people etc.
Where the mobile money economy has succeeded is to soften the eligibility criteria so that poor people and vulnerable groups can have the opportunity to open up a mobile money account. On the contrary, with their criteria traditional bank accounts generally exclude the most vulnerable people of the society. One can think of a case whereby a person has to provide a passport to proof their identity when these people cannot afford the cost of making a passport and have another document to prove their identity but which is not acceptable to the banks.
In short, it is possible to reduce or end poverty through eligibility criteria set up for people to access a particular service whether it is financial or social or environmental or other one.
Project of Integration between Financial Literacy and Digital Literacy Skills – Financial and Digital Literacy Skills Development Project (Page 10 of FACS)
The aim of this sustainable development initiative is to reduce poverty amongst people who are financially and digitally illiterate in Africa by giving them an opportunity to build and develop financial literacy skills and digital skills so that they can empower their life beyond the simple use of mobile money accounts and data, and make informed decision on financial matters, resources and wealth.
The project will provide to users or beneficiaries the ability to use basic digital knowledge and skills to manage financial resources effectively via their mobile money accounts and other accounts.
Beneficiaries can learn and develop basic life and financial skills of creating a budget, tracking spending, paying off debt, planning for retirement, management wealth etc. Beneficiaries will as well be able to find, evaluate, utilise, share and create their own content using online technologies and the internet.
The anticipated outcome from this project is to increase the number of financial and digital literate people amongst poor people and communities in Africa.
For details and full project proposals, please contact CENFACS.
To request a paper copy of the 61st Issue and/or previous Issues of FACS, contact CENFACS.
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We look forward to receiving your regular visits and continuing support throughout 2018.
With many thanks