Mobile finance – indigenous, ingenious, or both?

In Ghana it’s popularly known as susu. In Cameroon, tontines or chilembe. And in South Africa, stokfel. Today you’d most likely call it plain-old microfinance, the nearest term we have for it. Age-old indigenous credit schemes have run perfectly well without much outside intervention for generations, although in our excitement to implement new technologies and ‘solutions’ we sometimes fail to recognise them. Innovations such as mobile banking – great as they may be – are hailed as revolutionary without much consideration for what may have come before, or who the original innovators may have been.

The image of traditional African societies based predominantly around “simple hunter gathering” is more myth than truth. The belief that Africa had little by way of economic institutions and processes before the arrival of the Europeans is another. As Niti Bhan pointed out during her fascinating “Life is Hard” presentation at the Better World By Design Conference earlier this month, today many rural communities are familiar with concepts such as loans, barter, swap, trade, credit and interest rates, yet the majority remain excluded from the mainstream modern banking system and have never heard of things like ATM’s, banks, mortgages or credit cards.

It’s not that people don’t understand banking concepts, it’s just that for them things go by a different name. In Kenya as few as one in ten people may have a bank account, but that doesn’t stop many of them using a number of trading instruments, or running successful businesses. Technology can certainly help strengthen traditional trading practices, and we know this because when technology is made available the users are often the first to figure out how to best make it work for them. Mobile technology is today showcasing African grassroots innovation at its finest.

Africans are not the passive recipients of technology many people seem to think. Indeed, some of the more exciting and innovative mobile services around today have emerged as a result of ingenious indigenous use of the technology. Services such as “Call Me” – where customers on many African networks can send a fixed number of free messages per day when they’re out of credit requesting someone to call them – came about as a result of people flashing or beeping their friends (in other words, calling their phones and hanging up to indicate that they wanted to talk). A lot of interesting research on this phenomenon has been carried out by Jonathan Donner, an anthropologist working at Microsoft Research. Today’s more formal and official “Call Me”-style services have come about as a direct result of this entrepreneurial behaviour.

The concept of mobile payments did, too…

This is an excerpt from “Mobile finance – indigenous, ingenious, or both?”. The full article can be read on the PC World website. Lists and PDFs of kiwanja’s other PC World articles are available on the kiwanja.net website