> Posted by Peter Goldstein, Director of Foundation Relations, InterMedia

The Financial Inclusion 2020 project at the Center for Financial Inclusion at Accion is building a movement toward full financial inclusion by 2020. Accordingly, this blog series will spotlight financial inclusion efforts around the globe, share insights coming out of the creation of a roadmap to full financial inclusion, and highlight findings from research on the “invisible market.”

I recently looked over CGAP’s strategic priorities for the next five years, and one really resonated for me: understanding demand to effectively deliver for the poor. That’s because much of the work we do at InterMedia focuses on helping funders and implementers of digital financial inclusion understand people’s needs and priorities. We attempt to identify triggers and barriers to customer use and help providers activate the triggers and sidestep the barriers in product design.

At a basic level, understanding people is about listening to them, but in ways that prompt meaningful and relevant comments from those intended to benefit from financial inclusion. We aim to go beyond simple data points to identify the underlying reasons that, say, someone might use mobile money transfer services instead of hand delivery, or prefers to store their savings in cash rather than in a bank account or on a phone.

Our work in Tanzania provides good examples of how a few carefully targeted conversations can reveal valuable insights about the user experience. The Tanzania Mobile Money Tracker project ran from late 2011 through 2012 and was based on quarterly consumer surveys, consumer focus groups, interviews with mobile money agents, and “mystery shopping” in agent stores. The combination of these elements provided us with a 360-degree view on the user side of the equation.

In the process, we noticed mobile money users talking about paying for registration, and non-mobile money users saying they did not want to use the services because they heard it was expensive to register. This was intriguing, because registration is supposed to be free! We looked for additional information on how common it was for mobile money users to pay, how much they were paying, and why they might have been paying. Our mystery shoppers found that in many cases the agent asked for TZS500 as a “registration fee” and another TZS500 for a new SIM card. The latter is valid if the customer did not already have a SIM or needed to upgrade an existing card.

To get a handle on how prevalent these practices are, we decided to add a series of questions to the quantitative survey to ask mobile money users if they were required to pay to register, how much they were required to pay, and for what purpose they were required to pay. We found that almost half of registered users had to pay to register, indicating possible fraud on the part of the agents. This is critical intelligence for the mobile network operators and for regulators seeking to expand mobile money usage.

Another key takeaway from the research was a sometimes substantial gap between awareness of mobile money services and actual understanding of what they can do and how they function, indicating a crucial missing link in the marketing chain. After all, a mobile operator may have the best mobile money product in the world, but if people don’t really understand it then they won’t use it.

In Tanzania, awareness over the course of the tracker study rose to extremely high levels, driven in part by ubiquitous advertising. By our fourth quarterly survey, 82 percent of respondents said they had seen or heard a mobile money advertisement in the last month, versus 59 percent in the first survey. But both consumers and agents said operators weren’t doing enough to explain their services. Indeed, few people seemed aware that the services could be used for anything other than transferring money to other people.

Operators also didn’t seem to be doing enough to allay concerns about system security. As the focus group participant below commented:

“My main concern is the security of my money. … It cancels even all the good things we have been discussing about M-PESA.”  -Male, younger nonuser, rural Arusha, Tanzania

At the end of the day, a successful launch and scaling of a mobile financial product – as with any product – is much more than just coming up with a great technology. There is a consumer ecosystem which needs to be understood and adapted to. This argues for a holistic approach to the field, informed above all by putting the clients at the center.

For more information on Financial Inclusion 2020, sign up for project updates.

Peter Goldstein is Director of Foundation Relations at Intermedia.

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