A Dhaka Tribune article by Hitoishi Chakma and Maria A May
In a recent Bloomberg interview, Bill Gates shares: “Banking is more fundamental than I realised. There have been attempts (at banking for the poor) by microfinance groups, cooperatives, but the transaction fees were always too high. Until we get those services down with very low fees and in digital mode, banking will only be for those who are better off.” In Bangladesh, where 95% of the population have access to mobile phones but only 20% have a formal bank account, the significance of such an opportunity for a banking revolution is even more pronounced. Indeed, since 2011, the Bill and Melinda Gates Foundation has made over $21 million in grants and equity investments in bKash.
Bangladesh has seen one of the world’s fastest growing mobile money ecosystems develop in the past two years. This growth has propelled bKash to become the second largest mobile money provider in the world, only behind Kenya’s mPesa. Ideally, this growth in digital money is also an opportunity for pro-poor financial service providers such as microfinance institutions to significantly expand financial access.
We are only to look at Kenya’s M-Shwari, that gives users instant access to short-term credit and secure savings for inspiration. As of 2015, one in five Kenyan adults are active M-Shwari customers. With the use of mobile money picking up here in Bangladesh, it is fast turning into an opportunity to ensure that everyone can enjoy the full benefits of banking products. Mobile money fees in Bangladesh, when comparing small transactions such as Tk400, are among the lowest in the world.
Yet for all the adoption of mobile money we have seen in Bangladesh, there remains one key segment of the population that has yet to embrace it - women, especially poor women living in rural areas. Despite the rich history of women’s participation in microfinance and savings groups, when it comes to mobile money, over 80 percent of the mobile money users turn out to be men. What explains this lag and what can we do about it? Especially when poor rural women can benefit immensely from access to such services that would enable easier remittances, create new savings mechanisms, and even make purchasing airtime hassle-free.
Since 2014, through the Gates Foundation-funded Innovation Fund for Mobile Money, BRAC has been piloting different projects in providing digital financial services for the poor. This experiment with mobile money aims to see how existing BRAC services can be transformed into more effective and valuable solutions for the poor. Over the past one-and-a-half years, these experiences ranged from providing digital microfinance in remote communities to offering flexible school fee payments that allows low-income parents to pay in small installments. Overall, the projects have targeted women and girls, focusing on their needs in products and financial education.
However, as we have found from the pilots, it is not easy for a rural woman to master mobile money. These women often report that they are satisfied with the ability to simply receive calls and may lack the basic numeracy skills required to navigate the mobile money menus. This has prompted us to begin providing financial education, where we provide basic numeracy skills and develop financial management skills. In places like remote Hatiya, where literacy levels are low, it can take three to six months of financial education before a woman feels confident carrying out her own transactions.
While this is a lot of work, it is easy to assume that women are lagging behind in adopting mobile money because of an information gap. Certainly, limited information and literacy create challenges, but in fact, the barriers to adoption go much deeper.
A recent exploration of the problem using human-centered design techniques solidified these convictions. One of the central comments heard repeatedly from women is that they do not identify themselves with becoming users of mobile money, which is the domain of the businessman. Additionally, many women lacked confidence in their ability to use the service preferring to use cash instead. This shows that, like most of us, they are present-biased and seek to avoid the immediate difficulties associated with learning to use the service even though it would bring them greater benefit in the future. By simply relying on agents their basic needs were being met and many commented on carrying out transactions with agents as “fine.” Fortunately, these issues can all be addressed, but not through traditional financial education. Instead, this requires more creativity from mobile money providers and NGOs on how they design their services.
What inspires BRAC the most is the increasing number of women from Hatiya to Panchargarh who, despite all of these issues, are now expert mobile money users, confidently buying airtime, making deposits into their savings accounts, and managing their remittances. Their needs superseded their unfamiliarity and fear of technology. Many received significant support from BRAC’s staff and/or local bKash agents, who they trust and can access as needed. Given the challenges of reading the English menu, many used rote memorisation through mnemonic techniques to make these transactions.
Ultimately, necessity drives innovation. Till date, despite the potential present, womens’ demand for mobile money in Bangladesh has not been activated. Reaching these women is a must, if a banking revolution is to be ignited for the poor through mobile money.
The original article can be found at: http://www.dhakatribune.com/feature/2016/feb/15/mobile-money-bangladesh#sthash.52aJVlqt.dpuf