November 20, 2012
Julia Arnold is a Program Associate for Grameen Foundation’s Microsavings initiative. If you have any questions for Julia about her time in India with the members of Cashpor, she will answer them here in the comments section.
In July, on behalf of Grameen Foundation’s Microsavings initiative, I went to Cashpor Microcredit in Varanasi, India, to conduct research on mobile phone use among its savings and credit clients. The microfinance institution (MFI) began offering savings services via mobile phones in July 2011, providing a vital financial service to its clients to which they would not otherwise have access. Building assets through a safe, reliable savings account helps the poor plan for the future and mitigate the risk of small, unreliable incomes.
Though we understood that a majority of Cashpor clients had some access to a mobile phone before the MFI began offering the savings services, there is global evidence that poor women have limited access to and literacy with mobile devices. We wanted to know if the mobile phone requirement in Cashpor’s program limited the ability of its clients, all of whom are female, to access the savings services.
We spoke with women who owned phones, those who borrowed phones and those who had no access to a phone. It turned out that half of the women who borrow phones to save with Cashpor reported that there were times when they wanted to use the phone but didn’t have access to it. And many of the women who owned a phone were unable to use it independently, because their knowledge of how to use the phone is limited. All of the women relied on Cashpor to make their savings deposits on their behalf.
Babita manufactures small brass chairs for the gods in Hindu temples.
I spent nearly a month in Varanasi and interviewed 65 clients – to whom I am indebted for sharing their time and stories with me. I spoke to women with varied experiences with mobile phones. Babita, a savings and credit client at Cashpor, owns her own phone and a very unique business: She manufactures ornate doll-sized brass chairs that are used by Hindu temples for rituals. Essentially, she makes seats for gods! Her nephew taught her how to use the phone, which enabled her to quickly learn how to check her savings balance using the five-digit SMS provided by Cashpor. Babita was clearly a leader in her group – she was extremely confident and other members told me she helped them with their phones.
In contrast to Babita, I met Asha, a new credit client. She does not have access to a phone, nor does she own a business. A small, rail-thin, demure woman, she spoke so quietly it was difficult to hear her at times. She is excluded from all household financial decisions – claiming that her husband and 18-year-old son take care of the finances since they earn money for the household by selling paan (a tobacco-like substance) and bangles. Her son owns a phone and she told us that both he and her daughter can use it. However, she doesn’t know how her son uses the phone – whether for work or to call family – and she doesn’t know if her husband or son have a savings account outside of Cashpor. Despite being left out of her household’s financial decisions, she did say that if she had access to a phone she would like to save with Cashpor.
I also spoke to women who borrowed a household phone to save with Cashpor. Many of these women told me their husbands owned the phone, but it was considered a household phone – an asset available to everyone under the roof. Like Bindu, a credit and savings client, these women cannot use the phone on their own. To save, the Cashpor center manager conducts all the transactions on their behalf, including checking their balance. When I asked Bindu why she did not own her own phone, she said they cost too much and she cannot use it on her own. Like these women, Bindu primarily uses the phone to call relatives, relying on her husband to dial the phone for her.
These three women are just the tip of the iceberg when it comes to understanding how Cashpor’s clients use the mobile phone. Three lessons are clear from the study:
- Cashpor (or any MFIs who want to offer mobile-based savings services) must promote mobile phone ownership if the phone is to remain a requirement for delivering savings. Providing financial services on a borrowed phone is not sustainable; the mobile requirement excludes customers without access to a phone.
- Cashpor must also find a way to train users on how to use the mobile phone. Most of the women relied on a family member to use the phone. Mobile phone literacy creates a sense of ownership of the product and trust in the institution, as well as the mobile phone as the medium.
- The children of Cashpor’s clients are teaching themselves how to use the phones and passing that knowledge to their mothers.
Cashpor is providing a vital service to which its clients would not otherwise have access. Taking the lessons from this study, it may be able to provide this service more effectively and with longer lasting benefit to its clients.
Comments
Great questions, Alex. If no changes are made, Cashpor will likely see low or stagnant growth (ie, new savers) of its savings services. Mobile phone ownership or access may increase among some women (I spoke with at least three women who mentioned they were planning on buying a phone soon), but as my research shows, it's the numeracy and literacy (and confidence) issues that are the true barriers. In addition, the women who have opened accounts will likely deposit more and more infrequently, as we are already seeing. If Cashpor can help increase mobile phone access and provide phone literacy training, it will likely see not only more accounts being opened, but more account usage. I can't speculate on whether Cashpor will make my recommendations a priority, but as they are facing some challenges with regards the savings services, I would highly recommend they provide mobile phone training and innovative ways to increase access. While it can't solve all their challenges, it may help decrease the dormancy rate by creating more of a sense of product ownership among their clients. Trust is paramount and Cashpor can increase trust among its clients through empowering them to use the technology and the product.
Thank you Ms. Arnold for your article. I found it interesting, well-written, and informative with useful description and factual details taken from the field. Above all it shows the gender discrimination which still exists today and especially in India where women are still dependent on men...even with modern technology... However I like the spirit of those working women, with their strong personalities and will-power, they are eager to advance and to learn how to use the mobile phone which has become an important business tool .. Pls Keep up with the good work and writing more articles.... I am sure very soon all those working women will have a phone and will be calling each other.. Again, thank you Grameen Bank for the wonderful development work u are doing in the field!
This is an excellent blog and makes me more excited about reading the entire case study. I'd be interested to know what the author thinks the trend (i.e., likely future in 2-3 years) would be if current policies are followed, and alternatively if her recommendations are followed. Also, how open is Cashpor to your recommendations and if they like them, do you think that implementing them is likely to be a priority with so many other competing demands? Thanks again for writing such a useful, practical blog and paper!