The Potential of Mobile Money as a Foundation for New Services and Functions

A Research Study with Special Reference to Financial Inclusion of Poor Women in Urban India

PROPOSAL ABSTRACT
Mobile Money has been striving to secure a firm and known ground for a while now, but for many- its familiarity is limited to using the mobile phone to pay up. One issue that can be debated in academic circles is how mobile money works; and more importantly, what applicability could it have to benefit users, particularly the poor? Talking in the Indian context, mobile wallets are still at a nascent stage, but knowing for a fact that mobile phone owners could possibly outnumber banking customers, its popularity and subsequent usage could shoot up in a few years. The essential stakeholders of mobile money chain are banking/non-banking firms, telecom providers, manufacturers and developers. Mobile phones are being used for banking purposes, such as checking one's account balance, getting updates about transactions and more. Since mobile money and awareness about it is still in an emerging stage; it may increasingly be accepted in urban areas, but is a matter of concern for mini metros and rural areas. Several people are hesitant about payments made via other modes not involving cards or cash and it is high time that we get over our reservations of making mobile and online transactions. Today mobile phones are not simply confined to being available in the urban areas, and have begun penetrating the rural areas as well. This major shift is seen due to the awareness created by telecom providers and phone makers. There has been a drastic increase in the number of mobile phone users, and this number again has moved onto cover even those who're in the

non-banking segment. This only goes on to add that mobile banking may sure be the next big thing in the mobile scheme of things. However, issues such as consumer awareness and safety, while using a new medium of transaction need to be addressed well.

PROJECT NARRATIVE
Contextual Background Mobile payment is a new, evolving and rapidly-adopting alternative payment method especially in Europe, Asia and many other developing countries. Mobile Money is a convenient, secure, and affordable way of sending money using a mobile phone. Mobile Money is available to all subscribers of the telecom service. Non-subscribers can also benefit from a number of the services in Mobile Money. One doesnt even need a bank account to use Mobile Money. The essential stakeholders of mobile money are banking/non-banking firms, telecom providers, manufacturer and developers. Mobile phones are being used for banking purposes, like checking one's account balance, getting updates about our transactions and more. In India, mobile money has been introduced by Airtel, Obopay, Vodafone, Loop Mobile and Nokia Money among others. In many developing countries like India, Pakistan and Afghanistan; mobile money represents a potential solution for the hundreds of millions of individuals who remain unbanked- providing them a variety of financial services such as digital payments, transfers and remittances, savings, credit, and insurance. According to Bill & Melinda Gates Foundation, tools like mobile money can play a key role in determining whether a poor household is able to capture an opp ortunity to move out of poverty or weather a shock without being pushed deeper into poverty. This is a key aspect of helping poverty-stricken people in developing countries.

Mobile money or Mobile banking involves using mobile phones to deliver various financial services to customers. Mobile money through mobile financial services is a channel for poor to have access to small business loans/microfinance, savings accounts, insurance and tailored investment opportunities. They can use mobile bank account cash credits to pay bills, shop for food items and other personal items and transfer funds without physically carrying cash around or keeping it at home, which has the additional risk of keeping it safe and secure. One of the successful mobile money programs across the world is M-Pesa, which was first launched in Kenya in March 2007. It has set an example of how the Mobile Money concept can be deployed effectively. M-Pesa captured a significant number of customers, over 17 million within four years, for cash transfers. Making it cheaper and easier to send money may seem like a small innovation, but M-PESA has had a profound impact on the ability of Kenyan households to manage their money. M-PESA appears to have improved peoples ability to deal with shocks, allowed businesses to better coordinate their activities, and opened a connection to the financial system for a large swath of the previously excluded. The ability of friends and family to make immediate, real-time transactions of as little as $2 helps prevent unnecessary periods of going without food. Early research shows that households with M-PESA are more successful at weathering negative events and, specifically, do not reduce their food consumption when faced with a shock. Additionally, being able to get money quickly allows a family to take a relative to see the doctor on the first day of their illness, and children are able to attend school when they would have otherwise been forced to skip or drop out for lack of fees. The global revolution in mobile communications, along with rapid advances in digital payment systems, is increasingly creating opportunities to connect poor households to affordable and

sustainable financial tools through mobile phones and other digital interfaces. Mobile phone penetration in developing countries has increased exponentially over the past decade, and mobile networks are projected to grow steadily in coming years. Alternatively, making electronic transactions are part of everyday routine for many people living in developed countries. By taking mobile money functions like storing and sending value electronically for granted, people cause potential risk to the users. Cashless technology has some drawbacks with respect to the providers as well. In a developing nation like India, with remote villages where there are no or very few banks and the physical infrastructure is poor, Mobile Money Technology can exhibit significant value by contributing as a secure and efficient alternative to cash transactions.

The research study will focus on the potential of Mobile Money as foundation for new services and functions in the development and upliftment of the poor. Objectives of the Study & Research Questions The objectives of the research study would be to To study how far have the mobile money and mobile finances helped the poor especially the women come out of the poverty cycle- How can mobile money impact the lives of poor women? Has it made them any less dependent? Examination of the gender gap between women and men taking up mobile savings solution- Given that Mobile Money is equally accessible to both men and women, is there a significant gender gap in the take-up?

Explore the possibility of customization of Mobile Money services to cater to specific needs of women- Can Mobile Money be used to provide special services such as day care centers, pre-natal care centers, health services, vaccination and immunization programs, or a hotline for women to address emergency situations?

Study Area The study area for the research study would comprise of four metro cities- Delhi, Mumbai, Chennai and Kolkata. Approach, Methodology and Scope of Work The study would follow an exhaustive research approach. Both primary and secondary data would be collected through field survey and desk research respectively. Primary data would be collected through structured and semi structured questionnaires with open and closed ended questions. Secondary data would be collected through desk research, regulatory and policy documents, past study reports and journals, etc. Both quantitative and qualitative data and information would be collected. Primary data would be collected at the following three levels The service providers for mobile money The customers of mobile money services Other stakeholders of Mobile Money

Sample Size The study area for the research study would comprise of four metro cities- Delhi, Mumbai, Chennai and Kolkata. The sample size would besn 1 2 Respondents Service Providers Customers (Women) Each Metro City 2 300 Four Metro Cities 8 1200 Total 8 1200

Other Stakeholders in Mobile Money value chain TOTAL

100 402

400 1608

400 1608

Two service providers would be identified for interview in each metro. 300 women customers of mobile money would be interviewed in each metro. Women would be identified in consultation with the service providers.

100 other stakeholders who are a part of the mobile money chain like shop-keepers, banks, traders, etc would be interviewed in each of the four metros.

Sampling A purposive and stratified random sampling would be done to identify the women customer respondents. Data Collection Data collection would be done with the help of support investigators. These investigators would be thoroughly briefed of the questionnaires. Before going out to the field for survey, the service providers would be interviewed to get an insight of their model, profits, risks and drawbacks and understand their perspective. A combination of quantitative and qualitative set of questions would form the questionnaire schedule, which will be used for data collection. Data Analysis Collected data from the field, i.e. the primary data would be entered in the computer for tabulation. Simple statistical tools like the mean, median and mode would be used to analyze the data. The results of the primary data would then be comprehended with the secondary data where found relevant.

References & Bibliography

FINANCIAL SERVICES FOR THE POOR Strategy Overview, Bill & Milenda gates Foundation; http://www.gatesfoundation.org/financialservicesforthepoor/Documents/fsp-strategyoverview.pdf Promoting Financial Inclusion: Is Mobile Money the Magic Bullet? Hemant Baijal http://blogs.worldbank.org/psd/promoting-financial-inclusion-is-mobile-money-the-magicbullet How Mobile Money has changed lives in Kenya, Amolo Ngweno, Bill & Melinda Gates Foundation http://tech2.in.com/features/mobile-services/mobile-money-all-you-need-to-know/ http://www.ifmr.co.in/blog/tag/mobile-money/ http://microfinancehub.com/ Mobile Money in an Emerging Small Island Economy, ARPN Journal of Science & Technology, 2011-12 Mobile Money as a Savings Solution http://www.audiencescapes.org/mobile-money-savings-solution-790 Mobile Money: Cellphone Banking in Developing Countries, Policy Matters Journal http://mobilemoneyafrica.com/africa%E2%80%99s-mobile-banking-revolution-the-poornow-have-access-to-financial-services/ http://www.telecomcircle.com/2010/01/benefits-of-mobile-money-transfer/ http://asiafoundation.org/in-asia/2012/08/22/whats-holding-mobile-money-back-in-asia/

TIMELINES FOR RESEARCH STUDY COMPLETION

The research study would take nine months to complete. The month-wise plan of action is given belowSN Activity Months 1 2 3 4 5 6 7 8 9 1 2 3 4 5 6 7 Initial Desk Research and Literature review Designing Questionnaires and Pilot testing Discussion and interviews with Service Providers Briefing the support investigators for field survey Field Survey-interviews with customers and stakeholders Data entry, processing and analysis Report Writing/Submission of Research Study Report

PROPOSED BUDGET REQUEST Category- Expenditure Heads

Total Amount (in INR) A Salary & Wages Research Associate Support Investigators for field survey Sub-Total A No. of person s No. 1 2 Rs@per month 30000 15000 Months 9 4 270000 120000 390000 Total Amount in USD ( 1USD= INR 55) 4909.091 2181.818 7090.909

B Travel

No.of cities

Rs@per city

Train Travel @ 4000 per city per person/investigator Local travel @ Rs.1000 per day per person for 4 months Sub-Total B C Supplies & Material for Research Questionnaire Printing Data Entry Stationery, photo copying of relevant data/information, books, journals, etc Sub-Total C No.

4000

48000

872.7273

30000

360000 408000

6545.455 7418.182

Rs. @ 5 12040 20000 218.909 363.6364

2408

25000 57040 No.of perso ns

454.5455 1037.091

D Other Costs Mobile & Communication per investigator @ 700 per month Mobile & Communication research associate @ 1200 per month Report printing 2 copies @ Rs.5000/- each Sub-Total D TOTAL (A+B+C+D)

Rate per month

months

700

5600

101.818

1200

10800 10000 26400 8,81,440

196.363 181.8182 480 16026.18

Budget Justification
A Salary & Wages Research Associate Support Investigators for field survey No. Rs@per month Months TOTAL INR TOTAL USD 1 2 30000 15000 9 4 270000 120000 4909.091 2181.818

Sub-Total A

390000

7090.909

Justification: The PI would be expected to put in time equivalent to at least one course. One Research Associate is required to help in formulating the questionnaire, in contacting and fixing appointments with service providers and conducting interviews with stakeholders. 2 investigators will be employed on a part time basis to collect data for 4 months.

B Travel Train Travel @ 4000 per city per person/investigator Local travel @ Rs.1000 per day per person for 4 months Sub-Total B

No.of cities

Rs@per city

No. of persons

TOTAL INR

TOTAL USD

4000

48000 872.727

30000

360000 6545.45 408000 7418.18

Justification: The project involves a lot of travelling and discussions with several stakeholders. The data to be collected from the visits will come from travel. Hence travel forms an essential part in this project. The travel budget will include boarding/lodging of the PI/ RA and the investigators as well as local travel. TOTAL INR 5 12040 TOTAL USD 218.90

C Supplies & Material for Research Questionnaire Printing Data Entry

No. 2408

Rs. @

2000 363.6364 25000 454.5455 39040 1037.091

Stationery, photo copying of relevant data/information, books, journals, etc Sub-Total C

Justification: Supplies and Material are needed for printing out the questionnaire, buying paper and related material. Data entry would be done by professional data entry operators.

D Other Costs Mobile & Communication per investigator @ 700 per month Mobile & Communication research associate @ 1200 per month Report printing 2 copies @ Rs.5000/each Sub-Total D

No. of persons

Rate per month

No. of TOTAL Months INR

TOTAL USD

700

5600

101.8182

1200

10800

196.3636

10000 26400

181.8182 480

Justification: Everyday communication is a must to monitor the survey. In addition, communication for fixing appointments, arrangements for boarding and lodging, arranging for travel tickets, etc would also involve cost.
TOTAL (A+B+C+D) INR 8,81,440/USD 16026.18/-

MY RESUME
CURRICULUM VITAE- VATSALA JOHRI DOB: 18th March 1990 Contact no: 8939205008 Email: vatsala.johri@ifmr.ac.in

EDUCATION
Qualification PGDM-DSF B.A (Hons) Economics XII X Year 201113 2010 2007 2005 Board/University IFMR University of Delhi CBSE CBSE Institute IFMR Miranda House Sardar Patel Vidyalaya, New Delhi Sardar Patel Vidyalaya, New Delhi CGPA/% 3.43 64.3% 89% 89.2%

Academic Achievements Recipient of the J-PAL scholarship worth INR 100,000 at IFMR.

PROFESSIONAL EXPERIENCE
Mott MacDonald Pvt Ltd, Noida Feb 2011 April 2011 Management Trainee

Roles & Responsibilities: Conducted field surveys to collect primary data Data analysis and report writing Preparation of bid documents for business development Key Learning and Achievements: Data analysis, interpretation and report writing Interpersonal, communication and presentation skills

INTERNSHIPS & PROJECTS

NAME OF ORGANIZATION Standard Chartered Bank, Mumbai (Mergers & Acquisitions Team) Centre for Studies of Developing Societies (CSDS), New Delhi ROLE Summer Intern Team Member PROJECT NAME Comparable Companies Valuation Analysis for 7 Industry Sectors in India Inclusive Media for Change Project