Research on economic pressure in Africa has been approached from diverse vantage points.听 While economists frame 鈥榩ressure鈥� as a consequence of market failures, or as a such as or technological and political change, anthropologists who zoom in on the economic pressures individuals face in their , i.e. the lived experiences of those who are 鈥榰nder pressure鈥� have focused more on topics such as uncertainty and precarity. Alternatively, economic psychologists tend to naturalise pressure as an individual response to an adverse financial situation, eclipsing the varied ways pressure is intertwined with and shaped by broader societal transformations, power structures, social relations and obligations, and webs of exchange. There are currently no studies we are aware of that focus on the multi-faceted societal constitution of economic pressure in capitalist Africa, or that compare how pressure is experienced across gender, generation or socioeconomic groups.Read More »
Over the past decade the expansion of digital-financial inclusion through innovations in financial technology (fin-tech) has been identified by the World Bank, the G20, USAID, the Bill & Melinda Gates Foundation, and other major international institutions, as a key way to promote development and alleviate poverty in the Global South (; ; ). Perhaps the most influential and widely reported publication pushing forward this narrative is an article examining M-Pesawritten by US-based economists TavneetSuri and William Jack鈥�and published in the prestigious journal Science鈥�entitled ‘The Long-run Poverty and Gender Impacts of Mobile Money’. M-Pesa isa mobile phone, agent-assisted platform for transferring money from one person to another. It was originally developed with funding from DFID and has quickly become a darling of the digital-financial inclusion movement. In this particular article,the authors make the far-reaching claim that 鈥榓ccess to the Kenyan mobile money system M-PESA increased per capita consumption levels and lifted 194,000 households, or 2% of Kenyan households, out of poverty鈥� ().
Suri and Jack鈥檚 article in Sciencehas sent ripples through the global development community and has served鈥�as perhaps was intended鈥�to solidify support for upping the promotion of digital-financial inclusion initiatives across the Global South. Importantly, the article鈥檚claims of unprecedented poverty reduction have been uncritically picked up by all of the international development agencies and microcredit advocacy organisations, as well as by many mainstream economists, so-called 鈥榮ocial entrepreneurs鈥�, tech investors, and media outlets. Much like microcredit in the 1980s, fin-tech and digital-financial inclusion is now very widely seen as a 办别测鈥�if not the key鈥�to reducing global poverty and promoting local development.
In this post we summarise our recent article entitled 鈥業s Fin-tech the New Panacea for Poverty Alleviation and Local Development?鈥� (), which challenges Suri and Jack鈥檚 findings, and urges the global development community to take a second, more critical look at their study. We argue that the article contains a worrying number of omissions, errors, inconsistencies, and that it also employs flawed methodologies. Unfortunately, their inevitably flawed conclusions have served to legitimise and strengthen a false narrative of the role that fin-tech can play in poverty alleviation and development, with potentially devastating consequences for the global poor.Read More »
Getting access to credit is a critical challenge for small-holder farmers all over Sub-Saharan Africa . A new breed of financial-technology firms (fintech) promises to address this issue, claiming that digital technologies can lower the barriers for borrowers and cut transaction costs for lenders. As part of our, we have been examining these claims, studying how tech companies translate them into business initiatives and exploring the implications for knowledge production, economic growth and value redistribution.
In rural Kenya, fintech innovations are premised on greater efficiency and transparency and inspired by narratives of digital disintermediation. Similarly to what argued for migrant remittances by Vincent Guermond in a previous post of this blog series , digital lenders harness data (extracted through digital infrastructures) and algorithms to make farmers more legible and, therefore, more predictable. In order to expand their pool of data, Kenyan fintechs are increasingly embedding themselves into inter-connected digital infrastructures, or platforms. These platforms provide farmers with end-to-end solutions, and thereby bundle together financial services with the provision of agricultural inputs and information extension services. In so doing, lenders recalibrate and harmonize their risk-assessment procedures, and construct an ideal type of farmer whose financial behaviours and importance in the local value chain can be clearly pinned down.Read More »
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