The ‘Transformational’ Potential of Mobile Money in Zambia Frugal Innovation, Inclusive Innovation and Mobile Money Agents in Kitwe Iva Peša Centre for Frugal Innovation in Africa Centre for Frugal Innovation in Africa

Debates & Focus Mobile money Frugal innovation (‘catching up’ & ‘leapfrogging’) Financial inclusion (‘banking the unbanked’) ICT4D debates: ‘transformational’ potential Mobile money merely exacerbates existing socio- economic inequalities within political economy, ‘thintegration’ Does the frugal innovation of mobile money have the potential to become an inclusive innovation for a group of mobile money agents and tellers in Kitwe, Zambia? Entrepreneurship, employment generation, local economic development Centre for Frugal Innovation in Africa

Mobile Money in Kitwe, Zambia Centre for Frugal Innovation in Africa Three providers: Zoona (2009), Airtel and MTN (2012) 2015: 14.0% use mobile money (Finscope) Focus on agents and tellers Intermediaries between network providers and customers Financial ‘formalisation’: cash and virtual economy

Mobile Money Agents as Entrepreneurs “In Africa, there is a tremendous pool of entrepreneurs, business owners, and young people who dream of making money and serving their communities but who lack the right opportunity, resources and support to reach their full potential. Zoona is an African Start-up that offers these Emerging Entrepreneurs an opportunity to provide money transfer and other payment services to low- income consumers, while earning commissions and creating employment. We provide a mobile money platform, working capital financing, business management tools and entrepreneurial support focused on helping businesses grow and increasing financial inclusion in Africa.” Centre for Frugal Innovation in Africa

Methodology Survey among 52 mobile money agents and tellers in Kitwe Followed by in-depth interviews Topics discussed: Background, relationship to network provider, customer relations, business strategy, future plans Centre for Frugal Innovation in Africa

Background Age: Young (agents <35, tellers <25) Education: Grade 12 graduates Technology literacy Job experience: Difference between agents and tellers Career path? Gender Centre for Frugal Innovation in Africa

Financing, Business & Market Construction K1,500 or K3,000 as starting capital for agents Previous work experience, social capital or loans Reinvesting in mobile money business vs. quick profits Diversification and risk management Good customer relations and trust Building the social structure of a market: social capital Importance of location Centre for Frugal Innovation in Africa

Franchising, Labour Relations, Future Plans Franchising structure Managing float and cash Agents as independent business owners & entrepreneurs vs. tellers as precarious employees Future plans: Opening more outlets, diversification vs. non-transferability of skills Centre for Frugal Innovation in Africa

Agents as Entrepreneurs, Tellers as Precarious Labour? Mobile money agents as opportunity entrepreneurs (discovery & creation opportunities) How does this create new demand, new markets and entrepreneurial opportunities? Precarious labour conditions even among agents Mobile money tellers and ‘informalisation’ Does this impede effective financial inclusion and economic growth? Centre for Frugal Innovation in Africa

Conclusion Mobile money generates productive entrepreneurship, but does not address existing socio-economic inequalities For economic transformation, “changes to non-ICT specific structures and power relations that limit Africa’s ability to participate in the global information economy” need to be addressed (Murphy, Carmody & Surborg, 2014, 264) Mobile money as a successful frugal innovation? Scaling: agents & tellers – intermediation, trust and the social construction of a market, financial inclusion Mobile money as an inclusive innovation? Centre for Frugal Innovation in Africa