Last week, Innovations for Poverty Action (IPA) held a conference on “Innovations in Savings and Payments” in Kampala. I had a few days to kill in the city as I waited for a contract to be signed, so I decided to attend.
It didn’t disappoint – the lecturers were whip-smart, engaging, and presenting on some truly fascinating work on mobile money, commitment savings, and microinsurance; other attendees had interesting backgrounds and thought-provoking questions; and I left much more knowledgeable than I was coming in.
After giving it a few days to sink in, a few takeaways:
Mobile Money is the Future – But It’s Just the Start. M-PESA – which, incidentally, began as a way to shuttle microfinance payments around – and other mobile money services are growing in popularity, and could replace cash in parts of East Africa in the near future. But if it’s looked at not as an end but as a means – as a platform for innovation – then sending currency back and forth is just the start. Savings programs, loan programs, and insurance schemes can all be handled quite easily on the platform, and those services just scratch the surface of what’s possible.
But it Doesn’t Lead to Financial Inclusion Automatically. In fact, improperly-constructed mobile money schemes can exacerbate the financial access issues the worst off face. As Sean Krepp, the Uganda Country Director for Grameen Foundation Applab, put it, “mobile money doesn’t necessarily lead to financial inclusion;” the poorest and most “unbankable” to begin with probably don’t have access to a mobile phone, the agent networks, or other inputs to best take advantage of mobile money.
People Are Desperate to Safely Save. Mark Pickens, the Director of Emerging Market Solutions at Visa in Rwanda, told a story about a boda driver in Kampala: to save for a new boda, the driver would wrap up his intermittent savings in plastic, seal it with high-grade resin to make it water-tight, then throw the bundle in his boda’s gasoline tank. The only way to get the money out was to put an acetylene torch to the gas tank, essentially destroying the boda. All said, the driver’s interest rate was -16% – just to save. It’s a pretty nauseous reality: the poorest must pay a significantly higher proportion of their already-small income just to save.
There’s Still So Much to Learn. We still don’t really know what works, and some things that may work – price-linked micro-savings comes to mind (something I wanted to ask the too-busy Dean Karlan about) – haven’t been looked into or widely implemented. It’s an exciting time to be interested in, or working in, this sector.
One note about structure: it was, I was told by others, a lot like other academic conferences, s0 perhaps it’s no surprise that it felt like an inefficient use of the room’s time, knowledge, and passion.
Most sessions went something like this: two academics would present their research for 20 minutes each, followed by two discussants who talked on the periphery of that research for 10 minutes each. Audience members asked questions through written forms curated by the moderator, who would ask questions of the panel for 20 minutes. Audience participation was limited to listening, writing in questions, and listening some more.
With all of the smart, caring practitioners and academics in the audience, I assumed that it would be more interactive and small-group-oriented. Why not flip the conference structure around, and have the audience read the papers/presentations before coming, then use the all-together time to discuss how the research could be practically applied and exploited for real-world impact? Or, just to discuss the research and brainstorm potential future studies. Or, to do something other than sit and listen.
All in all, an excellent experience, and I’m very glad I went. Looking forward to learning more about the area in the future.