Technology along the Road to Financial
Inclusion: Exploring the Impact of
Mobile Money in Ghana
Master International Development Studies Kristina Smith
11128437 Supervisor: Linnet Taylor Second Reader: Courtney Vegelin
Abstract
“Technology along the Road to Financial Inclusion: Exploring the
Impact of Mobile Money in Ghana “
Mobile phones and the development of mobile money platforms promise to deliver financial inclusion for segments of society currently excluded from formal financial institutions. Rooted in ICT4D, previous research has focused on adoption and use of the technology as well as its potential for economic development. This research examines the use of the platform in underbanked regions in Northern Ghana and its development outcomes for users, through surveys, focus groups and
semi-structured interviews with mobile money users and agents. The research concludes that individuals use the technology to transfer money through social networks as well as to keep money secure for short periods of time, contributing to individual and household resiliency when faced with emergencies. Individuals use mobile money as one tool among many in intricate financial strategies, ultimately contributing to the process of financial inclusion.
Key words: mobile money, financial inclusion, unbanked, Ghana, mobile technology, digital platforms
Table of Contents
Abstract ii
Acknowledgements vi
List of Abbreviations and Acronyms vii
List of Figures vii
Chapter 1: Introduction 1
Chapter 2: Technology, Banking and Development Intersect 5 2.1 Information and Communication Technologies for Development 2.0 5 2.2 Formal Banking for More: The Process of Financial Inclusion 7 2.21 What the Financially Excluded Need from Financial Services 8 2.22 Development Outcomes of Financial Inclusion 9 2.3 Mobile Phones and the Connection to Financial Services 11 2.31 Mobile Money and Financial Inclusion on the Policy Agenda 12
2.4 Further Opportunities for Research 13
2.5 Conclusion 15
Chapter 3: Theoretical Framework 16
3.1 Theories on Technological Adoption 16
3.11 Technological Acceptance Model 16
3.12 Innovation Diffusion 18
3.13 Unified Theory of Acceptance and Use of Technology (UTAUT) 20 3.14 Technology Adoption in the Context of Ghana 21 3.2 Expanding Technology Adoption into Chain Analysis 22
3.3 The Sustainable Livelihoods Approach 24
3.4 Conclusion 26
Chapter 4: Research Context 27
4.1 Socio-Economic Background of Ghana 27
4.3 Mobile Phones and Mobile Money in Ghana 30
4.4 Understanding Northern Ghana 31
4.5 Case Selection 33
4.6 Conclusion 34
Chapter 5: Research Design 35
5.1 Research Questions 35
5.2 Epistemology and Methodology 36
5.3 Conceptual Scheme 37
5.4 Unit of Analysis and Sampling Method 38
5.5 Data Collection 38
5.51 Surveys 38
5.52 Semi-structured Interviews 40
5.53 Focus Groups 40
5.54 Observations and Field Diary 40
5.6 Data Analysis 41
5.7 Data Validity and Reliability 41
5.8 Ethical Considerations and Limitations 43
5.9 Conclusion 43
Chapter 6: Unpacking Mobile Money 45
6.1 Who are Adopters of Mobile Money? 45
6.2 Exploring how Mobile Money is Used 49
6.21 Mobile Money as a Means of Cash Transfer 49 6.22 Mobile Money as a Means for Saving 53 6.23 Mobile Money’s Further Capabilities 54
6.24 Conclusion 55
6.3 Barriers to Adopting and Using Mobile Money 55
6.32 Lack of Cash 56 6.33 Other Barriers and Creative Hacks 57
6.34 Conclusion 59
6.4 Mobile Money in the Context of Sustainable Livelihood Impacts 59
6.5 Conclusion 63
Chapter 7: Mobile Money, Banking and The Road to Financial Inclusion 65 7.1 Mobile Money vs. Formal Financial Institutions 65 7.11 Mobile Money for the Already Financial Included 66 7.12 Mobile Money for The Financially Excluded 67
7.13 Conclusion 68
7.2 Moving to the Digital: Trusting the Platform 68 7.3 Conclusion: Continuing Down the Road to Financial Inclusion 73
Chapter 8: Conclusions and Reflections 74
8.1 Main Findings 74
8.2 Theoretical and Conceptual Reflection 76
8.3 Methodological Reflection 77
8.4 Policy Recommendations 78
8.5 Future Research Agenda 79
Bibliography 80
Appendix One – Operationalization 92
Appendix Two – Interview List 94
Appendix Three – Survey 96
Acknowledgements
Many thanks are in order for the creation of this thesis. First, I would like to thank Linnet Taylor, for her patience and thorough guidance during the research and
writing process. Ken Kubuga and Francis Jarawura, for their indispensible guidance in the data collection process. Abdullah, for being the most willing of mobile money agents and answered so many of my questions. The many people of Tamale that never failed to offer friendship and new experiences. Maarten, my Dutch survival guide and Ilona, my cheerleader and coffee companion. Lastly, to my wonderful family for their unwavering support and enthusiasm for all of my adventures.
List of Figures
Figure 1. TAM2 Model 17
Figure 2. UTAUT Model 19
Figure 3. Chain Analysis of Technology Intervention 22 Figure 4. Sustainable Livelihoods Approach 24 Figure 5. Poverty Incidence by Geographic Area. 27
Figure 6. Map of Research Area 31
Figure 7. Conceptual Scheme 36
Figure 8. Graph of Survey Respondents Age 45 Figure 9. Graph of Education Level of Respondents 46
Figure 10. Graph of Income per Month 47
Figure 11. Graph of Frequency of Mobile Money Use 50 Figure 12. Graph of Occupation and Mobile Money Frequency of Use 51 Figure 13. Graph of Length of Mobile Money Use 59
Abbreviations
ICT Information Communication Technologies MFIs Microfinance Institutions
PRSP Poverty Reduction Strategy Paper SLA Sustainable Livelihoods Approach SDGs Sustainable Development Goals TAM Technology Acceptance Model TAM2 Technology Acceptance Model 2
Chapter 1: Introduction
Technology offers a catalyst for change, through the destruction of the old and creation of the new. For Schumpeter, technology is the mechanism for creative destruction, making old ways of production obsolete in light of new methods. The elusive and creative process of innovation promises the magic of completely new developments that will lead to fundamental shifts. Current developments in ICT technology offer the promise of being a catalyst to alter how societies and
economies operate. Specifically for the Global South, there is a belief that adoption of advanced technologies will be a huge step towards modernity. Mobile
technology, specifically the rise of mobile phones, offers a new tool on a global platform that in the hands of the many can be transformational. But is this true? Can advance technology adoption by the Global South lead to positive outcomes,
specifically the attainment of international development objectives?
The true test of technology for good is its unlimited potential to provide transformation. Specifically, technology creation and application can combat embedded social inequalities. Mobile phones and the development of digital banking services delivered through the mobile phone represent a key example of how technology is being used to address pressing social issues. The international development agenda has increasingly focused on the need to open up financial services to the approximate 2.5-billion working-age adults that are not able to access financial services (Demirgüç-Kunt 2012, CGAP.org).Development thinkers believe that the mechanisms of financial exclusion contribute to income inequality and slower growth in developing and emerging markets. Closing this lag in financial service provision is theorized to bolster economic activity and human capabilities, yet empirical data on the benefits of financial inclusion for development outcomes still has many gaps. (World Bank 2008, ix)
agenda. This includes specifically SDG1: Ending Extreme Poverty, due to the
potential for financial inclusion to bolster household and individual finances for the poor and promote economic growth. Expanding financial access and service
offerings to women, allowing them more independence and management of finances will contribute to SDG: 5, Gender Equality. The benefits of increased financial access and capabilities specifically for rural farmers will create increase growth in the farming sector, contributing to SDG 2: Reducing Hunger and Promoting Food
Security. Lastly, the benefits of saving and better financial management for the poor will lead to improvements in a number of capabilities enhancements such as health and education spending. (CGAP 2016) Overall, the process of financial inclusion is a crucial action towards achieving many objectives of the international development community, specifically in reference to the SDGs.
This interplay between development objectives, the process of financial inclusion and technology improvements are a unique trifecta in showing the power of innovation to address ingrained inequalities for the bottom of the pyramid. The development of mobile phones and mobile banking applications overcomes many of the current barriers to service use faced by both financial service providers and low-income and rural populations. More specifically, mobile money applications, the most famous being Kenya’s M-Pesa, are a much-discussed example of mobile phone and software development’s ability to transform social realities. Mobile phones and mobile banking services offer a technological development that can deliver access and expansion of financials services to those at the bottom of the pyramid that are currently unable to engage in the formal financial sector.
Digital financial services that facilitate the transfer, payment and saving of money are new software developments that can contribute to both increased financial access and financial activity. In November 2015, Vodafone announced it would launch its mobile money scheme in Ghana, joining the other major
telecommunication networks in Ghana in offering a mobile money service. The expansion and provision of mobile money for the many Ghanaians at or just above
the poverty lines offers a promise of increased financial capabilities, economic growth and other micro-level impacts. With competitive mobile money offerings and a significant amount of the population unbanked, Ghana is a prime case study for understanding the process and outcomes of technology interventions to deliver development milestones. While mobile money has enjoyed positive press on its uptake and outcomes, it is important to address the ways in which socioeconomic circumstances and the technology itself influence who becomes an adopter and what the development impacts of this process are.
Taking into account ideas of poverty reduction, technology adoption and financial inclusion, this thesis will explore mobile money in the Northern regions of Ghana. The central aim of the research is to understand the challenges, if any, to adoption as well as the changes and development outcomes for individuals as users of mobile money to technology. These two themes will be explored and linked to the policy agenda of financial inclusion, illustrating how both the process of adoption of mobile money and the outcomes the service generate are crucial factors in creating
financial inclusion. In order to answer these questions, the research will examine who are using mobile money services, how it is being used and look at perceived impacts of the technology and place these within the framework of financial
inclusion. Chapter 2 will provide an overview of the relevant literature, drawing on the topics of technology for development, academic discussion on financial inclusion and the links between mobile phones and the financial inclusion process, all to provide a clear frame on the way mobile technology can deliver financial access. Chapter 3 will establish the theoretical framework of this research, based on the concepts of technology acceptance and sustainable livelihoods. Chapter 4 provides the socioeconomic content of Ghana, specifically the Northern regions of the country and establishes why Ghana was selected as a case study. Chapter 5 offers an
overview of the research design, including methodological choices and data
how mobile money fits into the frame of financial inclusion, looking at the role mobile money has alongside formal financial institutions and how the social
construct of trust is essential to expanding mobile money. Lastly, Chapter 8 offers a reflection on the research findings, presenting a discussion and recommendations for policy, technology development and future research.
Chapter 2: Technology, Banking and Development Intersect
Technological innovation and development have a complex and linked affiliation. This intertwining of innovation, desires for growth and need for new solutions to address social issues means technology and development is a ripe relationship for discussion. This chapter will highlight a number of relevant discussions to provide a cohesive knowledge base for examining the technology phenomenon in question, mobile money. Specifically, the concepts of ICT for Development 2.0 (2.1) and the process of financial inclusion (2.2) will be explored. This chapter will detail what financials services the unbanked need (2.21) as well as explain the development outcomes of financial inclusion. (2.22) It will provide a description of how mobile phones can contribute to financial inclusion (2.3) as well as provide an
understanding of how mobile money, specifically, is framed as a contributor to financial inclusion on a policy level. (2.31) Lastly, it will detail further opportunities for research on mobile money and financial inclusion, rooting this work in the current academic discussion. (2.4)
2.1 Information and Communication Technologies for Development 2.0
There is a rich body of literature that seeks to comprehend new information and communication technologies (ICT) and the role it can play in development. This discussion reflects cross-discipline academic work that merges understandings of social development with ideas of innovation, communication, technology adoption and entrepreneurship. Seeing ICT as a means of development calls on the expertise of many fields, bringing together mechanics and innovation with social needs.
ICT4D or Web 2.0 represents the second phase of communication technology to be harnessed for social and economic development. ICT is seen to have the potential to be “an enabler of economic development, e-commerce, and in a broader context, social inclusion, such as e-democracy and e-health” (Kauffman and Riggins 2012, 453). Specifically, the emergence of mobile phones offers the promise to “leap frog”
instance, mobile phone coverage in sub-Saharan Africa has developed through a network of specialized base stations that can cover a range of five to ten kilometers of service (Aker and Mbiti 2010, 3). This technological jump bypasses the
infrastructure and cost challenges of old ICT platforms, specifically broadband Internet.
The uptake and use of mobile telephony in Sub-Saharan African is exponentially increasing. It has the fastest growing penetration rate of mobile phones in the world, moving from ten to 647 million subscribers from 2000 to 2011 (Carmody 2012, 1; Carmody 2013, 24). There are ten mobile phones for every one landline in Sub-Saharan Africa, and penetration of mobile phone coverage is 60 percent of the population (Aker and Mbiti 2010, 1). The large uptake in mobile phones in Sub-Saharan Africa represents a key mechanism for innovation. Continued decreases in costs of mobile handsets and airtime credit are theorized to increase how many and which socio-economic groups use mobile telephony. With such uptake, it is evident that the mobile phone has the power to be a transformative technology.
However, the ways in which mobile phones are used and the impact of this technology so far shows uneven outcomes. From an economic standpoint, mobile phones must offer a balance between costs and benefits, especially to capture new low-income markets. The ways in which mobile phone users operate in Sub-Saharan Africa, such as many individuals utilizing one handset with different SIM cards, points to considerable cost barriers and strategies of cost reduction for individuals (Carmody 2013, 29). Mobile telephone technology represents a top-down diffusion that risks a digital divide and there are serious concerns for the sustainable
inclusion of low-income groups (Kleine and Unwind 2009, 1060). On the other hand, there are striking examples of the innovative ways mobile phones are being used to address social issues. Social changes have come about through mobile telephony including increased access to market prices, opportunity for casual work, e-health and e-democracy efforts as well as new market opportunities around selling mobile phone goods. On a macro level, “10 more mobile phones per 100 people would
increase GDP per capita growth by up to 0.6 percentage points” (Waveman, Meschi and Fuss 2005, 10-19). The literature points to various examples of technological innovation and adoption by users. However, how meaningful and long term these impacts are remains unanswered.
2.2 Formal Banking for More: The Process of Financial Inclusion
There are increasing calls from the international development agenda to bring banking and financial services to individuals at the bottom of the pyramid, referred to in the catch all phrase of financial inclusion. Financial inclusion refers to the “process that ensures the ease of access, availability and usage of the formal financial system for all members of an economy (Sarma and Pais 2010, 613). A more tangible definition of financial inclusion is focused on the creation of “banking services at an affordable low cost to the vast sections of disadvantaged and low-income groups” (Mahendra Dev 2006, 4310). This extension of banking activities has a focus an increasing the number of account holders as well as expanding available services offered by mainstream financial providers to include savings, credit,
insurance, money transfer and remittances services that are “low cost, fair and safe” (Demiguruc-Kunt and Klapper 2012, 1). Creating such an inclusive system calls on many actors and requires the right atmosphere for successful product design, infrastructure and industry regulation.
Financial inclusion can also be framed through the reverse construct of exclusion. Financial exclusion refers to the process that prevents poor and disadvantaged social groups from gaining access to the formal financial systems of their countries (Conroy 2005, 53). It encapsulates the difficulties faced by certain social groups to access the financial system, such as bank accounts, savings and credit, and
difficulties in use of these services, such as overindebtedness or high service costs (Gloukoviezoff 2006, 2). Financial exclusion occurs due to a number of extenuating variables such as spatial factors of geographic location and population density as
branches unavailable and unaffordable to develop in certain geographic spaces. For the poor, lack of proper documentation to open accounts and high minimum
account balances and annual fees to maintain financial services are significant hurdles to accessing traditional bank services (Demiriguc-Kunt et al 2007, 2). The required initial deposit to open a bank account for the poor is often too high, with some formal banking institutions in Africa having minimum deposits as high as 50% of per capita GDP. (Asongu 2012, 11) These complex variables create embedded patterns of exclusion for segments of society, specifically in the developing country context.
For the purpose of this research, financial inclusion will be defined as an accessible and usable financial ecosystem that is affordable, fair and holistic. This is based on the measurements of the Global Findex database, a global data source on financial inclusion (Demiguruc-Kunt and Klapper 2012). This data source uses a number of indicators to capture financial inclusion including measurements on the access and use of formal bank accounts; payment behaviour; savings behaviour and borrowing behaviour (Demiguruc-Kunt and Klapper 2012, 8). Thus, this research will draw on this contrast between the penetration of formal financial actors alongside other mechanisms that increase access and facilitate financial activity for populations, specifically payments, saving and borrowing.
2.21 What the Financially Excluded Need from Financial Services
There are large segments of populations in developing countries that fall into the construct of financial exclusion. These are the poor and rural who are unable to access and utilize fair formal financial institutions, due to patterns of exclusion. Between “70 and 80 percent of the world’s population has no access to even the most basic financial services” (Firpo 2005, 1). In emerging markets, formal banks reach 37% of the population, in mostly urban areas (ed. Sarin 2005, 9). While formal financial institutions have low penetration with poor and rural populations, it is a myth to think that the poor do not bank at all. The financially excluded show innovative ways to engage in financial activity outside of formal service providers and it is important to understand what types of services the financially excluded would use.
Like any individual, the poor need basic income to survive and additional income that may be saved, spent or invested. The poor save for life fluctuations, such as important milestones, emergencies or opportunities of investment (Rutherford 1999, viii). In order to save money and access these savings, the poor use a variety of techniques. They may sell an asset or a future one such as future crops to gain large sums of money. Community savings clubs, and person-to-person borrowing represent informal mechanisms of saving and lending (Bannerjee and Duflo 2007).
Microcredit loans can be used as saving techniques, in which paying down the loan operates as a form of credit (Bannerjee and Duflo 2007). Yet, the ability to save money in a manner that is safe and with a reasonable return is a challenge for the poor. Challenges of temptation are common for all individuals across socioeconomic class, and the poor are no exception (Bannerjee and Duflo 2007). Financial streams into poor households are tenuous at best and susceptible to fluctuations and the power of an individual’s social network.
The microfinance industry has proven that the extreme poor are bankable. MFIs have high levels of loan repayments, even with relatively high interest rates (Firpo 2005, 1). Secondly, the various implementations of microfinance schemes in the Global South have learned valuable lessons of what works and what does not, and how financial services need to be designed for these populations. Financial services for the poor need to allow the poor to convert savings into usable large lump sums in order to cover common large expenses in life through an accessible and
convenient system (Rutherford 1999, vi). The institutions that deliver these
products need to be cost effective and pro-poor. Lastly, at a regulatory level there is a need to ensure stability of financial management by the government and
regulation that enables these products to flourish (Rutherford 1999, xi). Thus, it is clear that the financially excluded can and would benefit from the development of cost-efficient financial services that allow them to manage savings and household
2.22 Development Outcomes of Financial Inclusion
The continued marginalization of certain populations in a society from formal financial services creates patterns of social inequality. In developing countries, large segments of the population rely on the informal economy and struggle to get the physical collateral needed to join the formal financial system, creating ingrained social realities of exclusion (Conroy 2005, 58). Households that are not part of formal financial flows are generally cash based, making them vulnerable to
fluctuations in income and expenditures. Cash-based existence means finances are less secure and financial planning for the future is difficult to maintain. Continued exclusion from credit and savings means segments of the population do not profit from interest and tax benefits that formal saving accounts can offer (Mohan 2006, 1309). These continued circumstances create income inequalities and slower economic growth for the disenfranchised, who can neither access capital for economic growth nor grow existing capital in a meaningful way (Demiguruc-Kunt and Klapper 2012, 1).
The transition from unbanked to financial inclusion is promised to deliver beneficial development outcomes. Accessing financials services, on an individual level,
improves personal wellbeing and increases capacities to cope with emergencies. An individual’s ability to access credit has shown “positive outcomes on the household well being, including an increased ability to retain employment and increased income” (Bruhn and Love 2014, 4). By obtaining financial services, the poor can “increase their wealth, diversify their asset base and become more resilient to shocks” (Morawczynski 2009, 510). On a community level, research shows that financial access “for low income households has a significant impact on the labour market and income levels” (Bruhn and Love 2014, 4). From a macro perspective, increased financial sector services promise more equitable distribution of resources as well as economic growth and poverty reduction (Demirguc-Kunt et al 2007, 1). With proper tools, the poor, who already have extensive strategies with saving, will be able to build larger assets leading to financial deepening (Conroy 2005, 59). Extending financial services to the poor will allow them to climb the ‘banking
ladder’ to the capital of the formal economy. Therefore, integrating the poor into financial services should create deep socio-economic benefits and is an essential process in achieving poverty alleviation.
2.3 Mobile Phones and the Connection to Financial Services
Mobile phones represent a transformative technology to address financial exclusion, specifically for low-income and rural populations. The use of mobile phones for financial services provides solutions to common barriers to why people are unbanked. Mobile telephony represents a highly adopted and growing electronic infrastructure and can reduce transaction costs and increase services available to users. It also offers the opportunity to expand financial services to individuals without a traditional bank account, due to minimum paperwork requirements and low initial costs, namely the price of a SIM card, network subscription and basic identification.
With the high penetration of mobile telephones and network providers in the Global South, there have been many initiatives to create mobile banking platforms. At a broad level, mobile banking refers to “the delivery of financial services through mobile devices such as a mobile phone” (Tobbin 2012, 75). The services offered on these mobile applications range from micropayment platforms with merchants, bill payments options, peer to peer (P2P) transfers and remittances (Donner and Tellez 2008, 3; Aker and Mbiti 2010, 18). Technologies often blend capabilities of banking (m-banking), the ability to make transactions (m-payments), the ability to transfer money (m-transfers) and create concepts of digital money (m-money) (Diniz, Albuquerque and Cernev 2011, 4; Donner and Tellez 2008, 2-3). New mobile financial services have been created through both public-private workings and there is no one formula for the creation and implementation of mobile money platforms in the Global South. Differences in policy, public and private sector regulation and adoption patterns mean that mobile money platforms have
2.31 Mobile Money and Financial Inclusion on the Policy Agenda
Financial inclusion is a significant goal for the development policy agenda. The World Bank set an ambitious target to have universal financial access by the year 2020. Financial inclusion has a special focus from the UN, through the UNSGSA, as well as is an underpinning milestone for achieving several of the SDGs (CGAP 2016). Mobile money has been received with excitement in development policy for its ability to contribute to financial inclusion. Financial inclusion, as stated in chapter 2.2, refers to greater access and use of financial systems for excluded populations both through formal financial systems and other alternatives that can meet banking needs. Mobile money schemes have attracted great attention as one such alternative financial stream that can deliver on this commitment.
Mobile money services are seen as a capacity building technology to stimulate financial activities. Overall, the policy agenda highlights the strong potential for mobile money to be transformational. It also acknowledges that at this moment, mobile money is an “additive model” that is changing how money moves but not necessarily creating a deep and broad financial innovation (Donovan 2012, 71). However the excitement for mobile money comes from the potential for it to be morphed and expanded to create a robust system. Mobile money is seen as a “payment ‘rails’ on which a broader set of financial services can ride” (Mas and Radcliffe 2010, 172). It has the potential for innovation to allow the delivery of services such as microcredit; cash transfers and payment services, which together would create an expanded and holistic mobile money system. Further innovation from a number of actors including business, governments and institutions has the potential to utilize mobile money as the basis for a more holistic financial platform (Donovan 2012, 64).
Policy institutions and academic research has focused on mobile money launches in developing countries, showing patterns of mixed success and the influence of regulations and the market atmosphere on the adoption of mobile money by the general population. Kenya’s M-Pesa system is cited as a successful example of a
mobile money platform, capturing a large market share and user base. In one study, it was found that 43% of adults who used mobile money did not have a formal bank account, representing an unbanked population (Demirgüç-Kunt and Klapper 2012a, 26-27). Since the launch of M-PESA, there has been a large increase in indicators of financial access and bank account holders in Kenya, including a 30% increase in bank account holders over the age of 15. (Mwirigi M’Amanja 2015)In contrast, mobile money in South Africa did not have a large uptake nor increase access to banking. In fact, the launch of pro-poor bank accounts was more successful in capturing the unbanked market (Porteous 2007). Mobile money in India is seen as another market example where mobile money failed to make a deep change. The Global Findex data shows that only 4% of adults used mobile service to pay bills, send or receive money in India. (Demirgüç-Kunt and Klapper 2012a, 26 – 27) Overall, the mixed rollout of mobile money schemes in various countries demonstrated the wins and limitations of mobile money as a tool for financial inclusion.
Mobile money from an international policy perspective is still seen as a contributor to financial inclusion, with hopes of further expansion and deepening. There is a growing policy focus on how the factors of regulation, technology and environment influence adoption and use of mobile money services. Mobile money schemes, as a transfer service alone, are viewed as an initial step in creating financial inclusion patterns. There is continued optimism around the development of complex mobile money ecosystems that can allow open and closed activity for users and be deeply transformative.
2.4 Further Opportunities for Research
A review of literature on mobile financial services and development has highlighted extensive gaps in current knowledge and the potential for continued research on this topic. The complexity of the technology and its impacts calls for collaboration
have been conducted on mobile money and present the research gaps that need to be filled.
Research in this field can be divided into three areas of focus. First is research that is needs focused, that seeks to understand the reason, motivation and service needs of the poor in using mobile telephony (Donner 2008, 151). The second theme is research that focuses on adoption and uptake of mobile services. The last theme focuses on highly needed evaluation of impact and outcomes (Aker and Mbiti 2010, 24). A literature review specifically focused on mobile banking showed that
“consumer adoption, market analysis and mobile money and payment” were common topics (Diniz, Albuquerque and Cernev 2011, 16). Perhaps due to the relatively newness of mobile banking technology, literature has a high focus on adoption of the technology, leaving gaps in the discussion on regulation and effective socio-economic impacts (Diniz, Albuquerque and Cernev 2011, 29). As well, research questions that focus on women and their adoption and outcomes with ICT-based financial services holds potential. Drawing on the positive results of engaging women in microfinance schemes, research into if and how women adopt ICT-based financial services is a gap of interest (Kauffman and Riggins 2012, 461). There are ideas that mobile banking for women will impact household money dynamics, increasing autonomy and saving capabilities of women (qtd. in Donner 2007, 13).
Literature on mobile banking represents three levels of analysis, micro, meso and macrolevel, each with weaknesses and strengths (Duncombe and Boateng 2009, 1239). Research on this topic has offered micro level analysis focused on users, including research on user impact of mobile money in Kenya through ethnographic methods (Morawczynski 2009); household survey data on m-payments in Senegal (Batchelor et al, 2007); and individuals surveyed on cell phone banking in South Africa (Brown et al, 2003). Mesolevel analysis focuses on the intermediaries or deliverers of m-finance services, such as a case study by Hughes and Lonie on Vodafone’s strategy in Kenya (2007), and Sadji and Argarwal’s analysis of factors
influencing success of payment systems structure issues (2008). Lastly, macrolevel analysis looks at institutions and regulations as seen in Knight et al.’s high-level analysis of Grameen Village Phone program in Bangladesh (2008) and a cross-country analysis of ICT regulation in relation to e-finance and economic growth (Shamim 2007). Primary data collection that has occurred is focused on the micro level is for the most part “evidence base… relatively small and geographically concentrated” (Duncombe and Boateng 2009, 1251). Lastly, the literature points to the need for more qualitative data and analysis of primary data (Duncombe and Boateng 2009, 1252). Primary data is needed on access to financial services and the impact these products have on development outcomes (Demirguc-Kunt et al 2007, 7). Such reviews show the relevance of continued research into mobile money and the need for a focus on qualitative data collection for analysis.
2.5 Conclusion
Mobile phones and mobile banking represent a transformative technology in the toolkit of development. ICT4D 2.0 represents a line of thinking in which mobile phones can be a catalyst for both economic growth and capabilities enhancement. Mobile phones and cellular networks have had substantial uptake in the Global South and their continued expansion and changing technological abilities are a malleable tool for development. Exclusion from formal financial institutions is an ongoing reality for low-income and rural populations in the Global South. Taking the viewpoint of ICT4D 2.0, mobile phones can be used to build out mobile banking platforms to reach the financially excluded. Specifically, mobile money is seen as a tool to create financial inclusion and continued development of the technology will hopefully create deep, robust financial services for the unbanked. Research on mobile financial services, in its many forms, is relatively new and its rapid growth means that there are many questions to be answered. Adoption, patterns of use and impact across underserviced socio-economic groups and spatial areas are important areas of analysis, when interpreting the transformational power of technology for
Chapter 3: Theoretical Framework
This chapter will provide a theoretical framework for researching mobile money applications, with framing from both communication and international development literature. Specifically, the theoretical framework will draw upon literature around technological adoption (3.1), including the technological acceptance model (3.11) and diffusion theory (3.12), to offer a way to analyze how someone becomes a technology user. Secondly, the framework will draw on the work of Duncombe to frame mobile money as an intervention tool. (3.2) The Sustainable Livelihoods Approach will be used as a lens of analysis for understanding micro-level development impacts. (3.3)
3.1 Theories on Technological Adoption
At the core of this research is the need to understand how both mobile phones and the software applications created for the device are diffused and adopted in the context of a developing country. Mobile phones have achieved incredibly high levels of adoption in developing countries, despite low levels of penetration of older ICTs. There are extensive interpretations in the ways new technologies are adopted and used by individuals. As this thesis will be exploring the role of technology in a developing country, this poses specific challenges to most theories of technology adoption. Several mainstream technology adoption models will be explored and critiqued to provide a sound theoretical basis of analyzing mobile money.
3.11 Technological Acceptance Model
The Technological Acceptance Model (TAM) provides a basic framework for
understanding technology adoption and behavioural change. In this understanding, technologies are created, implemented and then adopted in ways that are specific to humans and their interactions with the technology (Davis 1989; Davis et al. 1989). At the heart of the TAM model is the belief that a user’s intention to use a new information system is determined by the user’s beliefs about the system (Chung et al 2009, 539; Luarn and Lin 2005, 875). Specifically, TAM focuses on two beliefs that explain how a
user adopts a new technology: perceived usefulness and perceived ease of use.
Perceived usefulness refers to an individual’s belief that using a particular system adds enhancement. Perceived ease of use refers to a person’s belief that the use of a system is free from effort (Davis 1989, 320). The easier a system is to use, the more likely an individual finds the platform useful and adopts the technology (Venkatesh and Davis 2000, 187).
The TAM model provides a behavioural understanding of interaction with a
technological innovation, however it is limited in its ability to conceptualize external social influences. An expanded model, called TAM2, allows for the analysis of
conceptual factors that may influence perceived usefulness and perceived ease of use. This model allows an expanded explanation of how human interaction; norms and social connections impact technology use (Luarn and Lin 2005, 875). The TAM2 model incorporates social influences on technological adoption, specifically subjective norms, voluntariness as well as the instrumental processes of the original model (Venkatesh and Davis 2000, 187). This theory of influence is concisely captured in the below diagram put forth by Venkatesh and Davis.
Figure 1. TAM2 Model (Venkatesh and Davis 2000)
The TAM2 model provides a useful framework for understanding the connection between individuals and mobile money applications. This research will take into account the motivations for technological acceptance of mobile phones, including social norms and social value of mobile financial services products put forth by the TAM2 model alongside perceived ease of use and perceived usefulness. The TAM theory is useful in articulating the notions of the technology itself and why it may be useful. However, its ability to conceptualize the role of the social and cultural
influence is limited.
3.12 Innovation Diffusion
Innovation diffusion in an alternate theory for technology adoption put forth by Everett M. Rogers. For Rogers, innovation refers to an idea, object or practice that is perceived by the adopter as new. Diffusion refers to the channels in which this technology spreads over time through social networks. In this theory, technology adoption occurs in a time sequence amongst individuals in a population (Rogers 1982, 241). Adoption follows a bell-shaped curve, as individuals, due to their levels of innovativeness, choose to use a new technology.
Adopters can be divided into five categories along the bell curve, starting with innovators, who have the capability and willingness to try an untested technology. Early adopters represent the next segment of the population that begin to use an innovation. This segment represents a key level of acceptance and these users have the social status to give opinion on the technology for the other segments. The next two segments hold the bulk of the population and are labelled the early majority and the late majority. These categories represent individuals with various levels of scepticism in using a new technology and thus are slower to adopt. The last group is labelled the laggards or sceptics and represent those that are last to adopt a new innovation. They represent an extremely localized and past-looking group, unwilling to accept change (Rogers 1982, 242-251).
The Innovation Diffusion theory is useful in visualizing and understanding the way technologies are diffused through the interconnections of individuals in a social space. It allows room for human interaction and technology benefits to merge with individual characteristics that influence the decision to become a user or not. In diffusion research, socio-economic status, patterns of personality and
communication behaviours are seen as influencers on an individual’s
innovativeness. More specifically, there is correlation between adoption and wealth, personality traits of openness and flexibility and patterns of embeddedness in social networks (Rogers 1982, 252-256). Diffusion theory also brings to light the paradox of technology innovation, in that it does not always meet the population it is
designed to assist. Technological innovations can widen gaps between socio-economic groups and populations that could benefit from an innovation may not become adopters of the technology (Rogers 1982, 264).
For the purpose of this research, this theory offers a useful conceptualization of diffusion through a social space. The inclusion of influential factors such as
socio-challenges of diffusion in a developing country context, specifically how physical infrastructure plays a key role in the diffusion of ideas and innovation through social networks.
3.13 Unified Theory of Acceptance and Use of Technology (UTAUT) The Unified Theory of Acceptance and Use of Technology (UTAUT) is a comprehensive framework put forth by Venkatesh. Based on prevailing
technological models including TAM, TAM2 and Innovation Diffusion, it offers a broader framework for interpreting the role of social and cultural influence in adoption. At its root, the theory takes into account an individual’s extrinsic
motivation (the value of the technology) and intrinsic motivation (that pleasure or amusement of use) when analyzing how technology is accepted (Venkatesh et al. 2012, 160). Venkatesh describes four main influencers on technology adoption: performance expectancy, effort expectancy, social influence and facilitating conditions. More specifically, performance expectancy refers to the benefits the technology provides when used. Effort expectancy refers to ease of use; social influence refers to consumers’ perceived belief that others use the technology and lastly, facilitating conditions refer to consumers’ perceptions of the resources and support available to perform a behavior (Venkatesh et al. 2012, 159). Of specific interest, this model incorporates the variables of gender, age, experience and voluntariness of use in its analysis. These defined dimensions are expressed in Figure 2 below.
The UTAUT model provides a more holistic interpretation of factors that influence adoption. For the purpose of this research, the inclusion of gender, age, and
experience are important additions to the theoretical model. The expansion of the dependent and independent variables allows the model to better explain the social and cultural factors that influence adoption. Secondly, the inclusion of gender and age is of specific interest to this study as its hypothesized these factors will be significant predicators of adoption for the case in question.
3.14 Technology Adoption in the Context of Ghana
Frameworks for technology adoption are useful starting points for understanding the phenomenon in question. However, these theoretical frameworks are modelled on the realities of technology in the developed world and questions of how locality and culture influence technology adoption remain. Theoretical understanding of the success and failure of technologies to thrive in developing countries are still hazy, due to a small yet growing source of literature and focus on case studies (Heeks 2002, 102). Existing frameworks do not take into account the barriers and factors that are specific to the way technology is adopted and diffused in a developing country context. These theories fail to address the question of basic access or pressing barriers faced in the developing world, such as spatial differences in population density, infrastructure, distance, integration with markets and a lack of research and development in these countries.
New theories are beginning to emerge that test the notions of TAM and technology adoption in the developing country context. The impact cultural constructs can have on technology adoption as well as the difference of norms between individuals and macrolevels highlight the challenges in undertaking research of ICT adoption in such a context. (Crabbe et al. 2009) There have been continuing efforts to expand the model of technology adoption to reflect the realities and influences in a
Specifically looking at ICT research undertaken in Ghana, there has been an effort to critique and expand existing theories on technology adoption. For example, Crabbe et al. in their research on mobile banking applications in Ghana, demonstrate the strong ties between social, economic and cultural factors that influence intention to use mobile banking (2009). More specifically, the factors of perceived credibility and facilitating conditions influenced adoption behaviour and not conceptualized in existing models (Crabbe et al. 2009, 540). Mobility also plays a role in the diffusion of ICTs, as demonstrated in an examination of Internet in Ghana. The dispersion of individuals within Ghana and outside its borders contributed to the diffusion of Internet services to areas in Northern Ghana, showing new dimensions of adoption (Linnet 2009, 202). A study on m-commerce for fishermen in Ghana stretched the theory of TAM, arguing for the need for further expansion of social communication as a dimension. The research found that the opportunity for improved
communication between individuals was an important factor in technology
adoption (Boardi et al. 2007, 255). Thus, looking at case studies in Ghana, it is clear there is a need to expand the models of technology adoption to capture the specifics of research in such a location. While the generalizability of these new dimensions remains to be seen, it is crucial to consider the impacts of the cultural and social setting when analyzing technology adoption.
3.2 Expanding Technology Adoption into Chain Analysis
The conceptual framework provided by Duncombe in “Researching Impact of Mobile
Phones for Development: Concepts, Methods and Lessons for Practice” provides a
useful means of capturing behavioural changes and impacts of technological acceptance (2001). Taking into account the theoretical precursors to technology adoption and the ways in which norms, culture and social influences impact
acceptance, Duncombe offers a conceptual scheme to analyze output and outcomes of technology use. The model shows a progressive chain of technological adoption: readiness, availability, uptake and impact. This model represents an ex post
technological activity, identifying impacts that occurring from adoption and use of mobile technologies (Duncombe 2011, 270). Viewing adoption of technology as an
intervention, impact research should strive to “identify the anticipated or actual impacts of an intervention, on those social, economic and environmental factors which the intervention is designed to affect or may inadvertently affect”
(Kirkpatrick and Hulme, 2001). Duncombe’s framework provides key ways to measure impact on several planes and clearly positions technology as an intervention tool. Figure 3 below provides a visual of this chain of technology creation, implementation and outcomes.
Figure 3. Chain Analysis of Technology Intervention (Duncombe 2011)
This research will draw heavily on the categorization of impact offered by
Duncombe. The separation of outputs, outcomes and development impacts is helpful in understanding and analyzing change. Specifically, this research will utilize the categories of outputs and outcomes to interpret individual’s experience using mobile payment services.
3.3 The Sustainable Livelihoods Approach
In order to fit outputs and outcomes within the context of development, this study will utilize the Sustainable Livelihoods Approach as the underlying theory for
interpreting outcomes. The Sustainable Livelihoods Approach (SLA) is a mainstream interpretation of poverty reduction and socioeconomic development theory within the stream of international development studies. SLA was first introduced by the Bruntland Commission on Environment and Development and gained traction as discussions on poverty eradication shifted towards more inclusive definitions. It is a theoretical framework used for program planning and poverty eradication goals for many NGOS and government development agencies.
SLA moves beyond simple economic understandings of what a livelihood is and incorporates understandings of capabilities and human freedom as put forth by Amartya Sen. Secondly, it represents a shift in thought, realizing that the
enhancement of the capabilities of the poor are crucial in their ability to take advantage of expanding economic opportunities (Krantz 2001). While the concept of sustainable livelihood can be broad, the definition put forth by Scoones offers a concrete interpretation:
“A livelihood comprises the capabilities, assets (including both material and social resources) and activities required for a means of living. A livelihood is sustainable when it can cope with and recover from stresses and shocks, maintain or enhance its capabilities and assets, while not undermining the natural resource base” (1998, 5).
This definition takes into account the complexity of livelihood for the poor and incorporates dimensions of human capabilities and wellbeing. The framework allows for context and complexity in how the poor seek their livelihood, captured in the dimensions of resources, strategies, outcomes and institutional processes (Scoones 1998). It offers an all-encompassing dimension of livelihood and a strong focus on resiliency.
Secondly the framework offers a useful conceptualization of the various resources and assets that are needed as input to livelihood activities (Farrington et al. 1999). These are categorized in the four capital inputs: Natural Capital; Economic or Financial Capital; Human Capital and Social Capital (Scoones 1998, 7-8). The SLA approach is also able to capture the influence of political and social institutions on intervention techniques. Figure 4 summarizes the sustainable livelihoods
framework and the complex inputs and outcomes that occur in this model.
Figure 4. Sustainable Livelihoods Approach
The strength of this framework, in relation to this research, is its ability to conceptualize intervention techniques and the outcomes of such activities in relation to achieving sustainable livelihoods. Specifically, interventions should increase livelihood through a) increased number of working days; b) poverty reduction; c) well-being and capabilities improvement. Interventions should
sustainability is ensured. Secondly, the strength of this approach is its ability to capture context and individual experience. It is able to link the micro experience to the macro (Ashley and Carney 1999). Finally, SLA recognizes that the poor
themselves often know their situation and needs best and the design of policies and project must include their feedback (Krantz 2001). Thus, the SLA will inform how outcomes of mobile money applications are assessed for poverty reduction. Its categorizations of livelihood outcomes will play a key role in how the outcomes of mobile money are conceptualized and interpreted.
3.4 Conclusion
This chapter has detailed several varying bodies of theory to create a holistic theoretical framework for analyzing the phenomenon in question, mobile money. Various conceptualization of technology adoption have been explored to show the strengths and weakness of these theories for this research design. Most importantly, concepts of social and cultural influences are important indicators for technology adoption alongside understandings of the physical technology itself. The ideas put forth by Duncombe alongside the concepts of SLA push the idea of technology adoption as an intervention tool. The ideas of output and outcome and the definition of outcomes by SLA will be used to frame the analysis on the social and economic changes that are occurring due to mobile money use. This theoretical framework will be returned to in Chapter 5, as these theoretical framings are highly important to the conceptualization and research design.
Chapter 4: Research Context
This chapter will give an overview of the research context and demonstrate why the geographic area of Northern Ghana was selected as a case study to explore mobile money. It will highlight the socio-economic background of Ghana (4.1) as well as the emergence of ICTs and mobile phones in the country. (4.2 and 4.3) Next, the socioeconomic context of Northern Ghana will be described. (4.4) Lastly, this chapter will explore why Northern Ghana is a relevant case study for examining mobile money. (4.5)
4.1 Socio-Economic Background of Ghana
The country of Ghana has a population of 26.79 million and a GDP of $38.62 billion. (Ghana, http://www.worldbank.org) Currently, it has the 9th largest economy in
Sub-Saharan Africa and is a regional power of West Africa. Its history is tied to the colonization and slave trade of the Gold Coast. Ghana was a former British colony beginning in the 1850s until 1957 when it regained its independence. Since independence, the government of Ghana has gone through many transitions, fluctuating between military coups and democratic rule. Currently Ghana has a parliamentary democracy that, beginning in 2012, is led by John Dramani Mahama.
Ghana is classified as a low-middle income country and has seen shifts to its main economic drivers in recent years. It is still highly dependent on high-value
commodities from agriculture and mining including cocoa, gold, timber, pineapples and mangos. However, on a macro-economic level Ghana has seen its service sector shift to be the largest contributor to GDP. Ghana also has seen offshore oil deposits contribute to a new oil sector in the country (Osei-Boateng and Ampratwum, 5). For the most part, informal economic activities employ most of the population. These activities include production, wholesale and retail sale of items around agriculture and fishing industries (Osei-Boateng and Ampratwum, 5).
Ghana has a long history of development and poverty reduction initiatives, tied to the Bretton Woods Institutions. Since the 1960s, Ghana has seen increased national debt through the structural adjustment process and loans from the IMF and World Bank. Ghana currently follows a PRSP, set forth by its largest donor the World Bank, that is designed to increase “economic growth, accelerate poverty reduction and enhance shared prosperity in a sustainable manner” (Ghana,
http://www.worldbank.org). With this economic plan, the county has reduced its poverty rate in half, from 52.6% to 21.4% between 1991 and 2012 and since 2011, has moved ranks to a low middle-income country (Poverty Reduction in Ghana, http://www.worldbank.org/). Yet, these statistics do not highlight the stark regional differences in growth, between the North and South of the country. The coastal regions of Ghana have lower poverty head counts, with higher levels of poverty in the northern landlocked regions of the country. The graph belowshows the poverty inequality among geographic regions in the country. (Nyarko 2014, 11)
Figure 5. Poverty Incidence by Geographic Area.
Economic growth rate continues to be unevenly experienced between the rich and poor, rural and urban. The population of earners in the 60th percentile have a higher
percentage of growth compared to those below, pointing to an emerging middle class specifically in urban areas. (Nyarko 2014, 23) Overall, there are still many challenges for Ghana on the road to economic growth and achieving targets for non-economic measures of development. Inequality between household and regions alongside environmental pressures will need to be addressed. Continued reliance on international institution and poverty reduction strategies continue to shape Ghana’s national development agenda and the tools it uses for poverty reduction.
4.2 ICTs in Ghana
Beginning in the 1990s, Ghana, at a national policy level, sought to work with the ICT sector for its potential in achieving economic and capabilities enhancement goals. Ghana has an overarching ICT for Development policy, with a mission to “engineer an ICT-led socio-economic development process with the potential to transform Ghana into a middle income, information-rich, knowledge-based and technology driven economy and society” (Ghana 2003, 8). This policy seeks to enlarge the service sector and information and knowledge capabilities of Ghana, making it globally competitive. Specifically, this policy highlights the need to provide ICT tools for underserviced populations, specifically women, rural populations and the urban poor (Ghana 2003, 57).
The diffusion and capabilities of ICTs is greatly uneven in Ghana, with greater diffusion of technologies in the coastal regions of the country compared to areas further inland. Since the 1990s, governmental reforms of ICTs in Ghana have stimulated privatization and competition in the sector, which combined with
product innovation, have led to increased penetration rates, specifically with mobile phones. Reduced tariffs and lower costs of handsets imported into Ghana have made mobile phone technology more affordable for many (Haggerty et al 2002, 18).
Competition between network providers of cellphones has also ensured service and subscription costs remain low. It is important to note the spatial variance in
4.3 Mobile Phones and Mobile Money in Ghana
Ghana, like other Sub-Saharan African countries, has experienced an unexpected boom in mobile phone uptake. The 2010 census reported 8,049,408 mobile phone owners, with high concentrations of ownership in urban areas (Ghana Statistical Service 2013, 344). Mobile phone subscriptions in Ghana show a startling high rate of penetration, with 31,154,420 subscribers as of June 2015. (Ghana’s Mobile
Penetration, www.ghanaweb.com)This represents an over 100 percent penetration rate compared to the population of 25.9 million. However these counts fail to
accurately reflect active users. These statistics reflect tendencies for individuals to have multiple mobile phones and network subscriptions due to unreliability of network services, especially in rural areas. As well these numbers do not reflect usage patterns and fail to capture users that move away from the technology over time.
Mobile phone adoption in Ghana is driven by the desire for communication and serves to expand the social space. Mobile phones are acquired for the desire and need to be in contact with others for emergencies, business purposes and social interaction (Sey 2011, 381). Large social networks and the desire to maintain strong kinship connections in face of continued patterns of migration make the mobile phone a highly valued possession (Slater and Kwami 2005, 11-12). As such, mobile phones have become a tool in individual’s poverty reduction strategies, as they allow direct communication in times of crises with a greater network (Slater and Kwami 2005, 11-12). Secondly, the ability to be in touch and on call increases livelihood potentials, especially for informal economic activity (Sey 2011, 384). Thus, mobile phones have become a highly used and adopted technology.
The mobile phone industry in Ghana is one of numerous actors and straddles the formal and informal private sector. There are five major phone networks: Airtel, MTN, Vodafone, Tigo and Glo. Formal channels include licensed handset suppliers and the formal offices of the network suppliers. Cellphone handsets are readily available in urban areas, ranging from basic feature phones for the price of 45 to 70
cedi or $11.75 to $18 USD to the newest IPhones at 3200 cedi or $822 USD for the handset. Credit agents represent more informal lines of work and these agents sell pre-paid credit and SIM cards. SIM cards can be purchased for 25 cents USD and pre-paid credit is readily available and sold in low denominations for consumers. Individuals can also be mobile money agents if they apply for a merchant SIM from the network. Mobile money agents take on aspects of a bank teller, acting as the customer service agent that facilitates the deposit, transfer and withdrawal of physical money in and out of the electronic money system.
There has been large uptake in creating mobile money platforms in Ghana by the telecommunications companies in the country, including Airtel Money, MTN Mobile Money and Tigo Cash (Mckay and Zetterli 2013). Vodafone launched its mobile money scheme in Ghana in late 2015, based off the successful M-Pesa Scheme in Kenya (Staefel 2015). All of these mobile money platforms are accessible with the purchase of a SIM card and a simple user registration. Physical currency is
converted to and stored in an electronic format on the user’s e-wallet, where it can be saved, transferred and withdrawn by the user. Most service providers now use a PIN system, where users create a unique 4 digit PIN that needs to be inputted by the user to access the e-wallet and conduct transactions. Usage fees vary amongst the providers but all are quite low. Typically transferring or withdrawing money comes at a surcharge based on the amount. A transaction of 100 Ghana Cedi/ $25 USD has a 1 cedi/$0.25 USD service fee for the user. Mobile money agents are numerous and easy to find in urban and peripheral areas and transaction time is quick. This
suggests that mobile money, due to affordability and ease of use, can mimic the capabilities of more formal financial services on a readily available technology platform.
Northern Ghana is a relevant geographic research area due to a number of
socioeconomic and infrastructure factors. The geographic area has a challengingly dry climate and is far away from the coastal ports of Ghana that connect to
international trade. It is predominantly rural, with fast growing regional capitals that face challenges in providing adequate infrastructure. The North has
consistently lower levels of income compared to the southern regions of Ghana. The spatial variance between the coastal and northern regions of the country show huge differences between socio-economic and capabilities indicators.
For the purpose of this study Northern Ghana will refer to the Northern, Upper East and Upper West Regions of the country. Figure 6 shows a visual of the area. These regions are the most effected by extreme poverty and are the three poorest regions in the country. The poverty headcount is the highest in this geographic area, with a poverty head count at 50.4% in Northern region, 44.4% in the Upper East and
70.7% in the Upper West (Ghana Poverty Map 2015, 7). These regions are largely agricultural, where low productivity, environmental factors and poor market access make agricultural activity largely subsistence. Scalability of farming activity is hindered by a lack of available finance for farmers. Most individuals get credit from family and friend networks and women headed households are specifically marginalized from formal credit lending opportunities (FAO 2012, 6).
Figure 6. Map of Research Area
The Northern Regions also score low on capabilities indicators, including lower literacy levels, education attainment and large gender inequality. There are a high number of female-headed households in the North, pointing to trends of migration where young, working-age males move to more urban areas for economic
opportunity (FAO 2012, 12). Mobile phone penetration across the three regions in Northern Ghana is fairly consistent at around 20-24% of the population over 12 year of age (Ghana Statistical Service 2013, 344). However, looking at
socioeconomic factors of the population, its evident that mobile phone ownership is not evenly distributed. Mobile phone ownership is influenced by sex, with more men owning mobile phones then women in all three regions (Ghana Statistical Service 2013, 344-345). Mobile phone ownership also varies amongst rural and urban populations in these regions. In the Northern region, 12.1% of the rural population owns a phone, compared to 43.1% of the urban population. Mobile phone owners in the Upper East represent 18.1% of the rural population and 45.9% of the urban population. Lastly, the Upper West region showed similar pattern, with 15.4% of rural and 50.3% of the urban population owning mobile phones (Ghana Statistical Service 2013, 346). The Upper West, Upper East and Northern Regions of Ghana represent a large geographic area with prevalent poverty, rural and urban settlement patterns. Compared to the southern coastal regions of Ghana, they score lower on GDP per capita, capability scores and mobile phone penetration. These three geographic locations represent an area where there are barriers and challenges to delivering development outcomes and thus are a crucial location to conduct research in.
4.5 Case Selection
Northern Ghana has been chosen as the geographic area for this study for a number of different reasons. First, Ghana itself presents a viable country location for
studying mobile money due to the high penetration of mobile phone subscribers and increasing availability of mobile money services across all telecommunication
into sociocultural life (Esselaar and Stork 2014; Overa 2008; Sey 2011; Slater and Kwami 2005). A lack of research on mobile money in Ghana and the attention paid to Vodafone launching mobile money in the country gives the research a sense of relevance.
Northern Ghana was chosen to narrow down the research area as well as to provide a location in which the objectives of mobile money to achieve financial inclusion could be better analyzed. Northern Ghana has been selected as the primary area of study due to its poverty, low market access and high barriers to technology
adoption. Rapidly growing cities in the North offering examples of urban areas alongside much rural space in the region. Northern Ghana represents an extreme case in which access barriers, prevalent poverty and underdeveloped infrastructure means the process of technology adoption is challenging and that the truly
unbanked could be targeted for this technology intervention.
4.6 Conclusion
Ghana is a low-middle income country, with a significant amount of its population based around informal economy activities in agriculture and fishing. Its government, on a policy level, has tried to engage with ICTs in order to achieve development targets. Ghana has enjoyed a large amount of uptake of mobile phones and a
growing body of mobile money users. The three regions in the North of the country have been selected as the geographic location for the research design for a number of reasons. Northern Ghana is a remote and poor area, representing an extreme case in which technology and formal bank institutions have a hard time providing
service. It offers a prime target area to analyze the potential of mobile money to contribute to the process of financial inclusion.
Chapter 5: Research Design
This chapter will present the research questions (5.1) as well as the epistemological and methodological approaches taken in the research design. (5.2) The conceptual scheme will be presented, drawing on the theoretical framework. (5.3) The data collection process will be described (5.4) as well as a reflection made on the reliability and validity of the data. (5.5) Lastly, a reflection will be made of the ethical consideration and limitations of the data. (5.6) The appendix contains the operationalization table that helped inform the transition from theory to research questions. The appendix also contains an interview list.
5.1 Research Questions
Mobile money platforms are theorized as an intervention tool for economic development and wellbeing enhancement. This research designs aims to gain an understanding of the outcomes and outputs that have occurred for individuals as a mobile money user. The main question of this thesis will ask:
What sustainable livelihood outcomes have individuals’ experienced since using mobile money services?
The following sub questions will help elaborate on the primary research question. The sub questions are as follows:
Are there differences in access due to socioeconomic status or gender?
This question will seek to clarify how external factors impact the use and outcomes of mobile money. Specifically, it will be interested in the gender, age and income influence who is and who is not an adopter of mobile money.
How do individuals use mobile money?
Drawing on the idea of outputs from Duncombe, this question seeks to find out what behavioural changes have occurred amongst users of mobile money.
Are there barriers to adoption of mobile money?
While linked to the above sub-question, this will help to unpack motivations for technology acceptance and barriers to the intervention tool.
