Women and Technology: The Opportunities of Mobile Banking

This meeting is part of the ExxonMobil Women and Development Roundtable Series, organized by CFR's Civil Society, Markets, and Democracy Initiative.

ISOBEL COLEMAN:  Good afternoon, everyone.  Thank you for joining us here today.  

I am Isobel Coleman.  I'm a senior fellow here at the Council on Foreign Relations and director of a relatively new initiative, Civil Society, Markets and Democracy Initiative, and also the long-time director of the Women in Foreign Policy program.  

And this is a meeting that is one of our Women and Development meetings that has been sponsored for several years by ExxonMobil.  And in the past we've done a variety of different things, from some high-profile events to a symposium to all sorts of different formats.  And this spring we are doing a Women and Technology series.  

We have three of those meetings scheduled.  This is the first.  The second one is going to be on May 10th with Professor Anne-Marie Slaughter, who is the former director of Policy Planning at the State Department.  And she's now back at Princeton, where she used to be the dean of the Woodrow Wilson School; she's back as a professor.  And she's going to come and talk about women and development broadly, and specially about the role -- the very central role women are playing in U.S. development efforts from a U.S. government perspective.  

As the former director of policy planning, she was very centrally involved in the writing of the QDDR and also food security initiatives and the clean cookstove initiative and various other things, all of which have very much focused on women.  So that will be  a very interesting conversation.  And I hope that those of you here today can be part of this series, ongoing series, looking at the role of women and technology.  

And then the third meeting, which will be a very interesting session too, featuring Martin Fisher, who's one of the co-founders of a wonderfully innovative organization called Kickstart, that uses low-cost technology to power up villages, basically, around the world; and also Pedro Sanchez, who's the director of the Tropical Agriculture and Rural Environmental Program at Columbia's Earth Institute, but he's really the person who's managed the Millennium Development Villages projects across Africa and has seen many different attempts to deploy new technologies cost-effectively to power up rural areas of Africa.  And I think together their perspective will be fascinating on what works and what doesn't work and the challenges and obstacles to deploying technology in the field.  So I hope that you will be able to join us for this ongoing series.

MS.    :  What date was that?

COLEMAN:  Oh, I'm sorry, that's June 1st.  June 1st.  And it's also listed in the program.  The last sheet of the program, the handout today, has information about the full three-part series.

Before I introduce our speakers today, I'm going to turn the meeting over to Lorie Jackson from Exxon-Mobil, who's just going to say a few words about their work in this area.

LORIE JACKSON (ExxonMobil):  Good afternoon, everyone, and thank you very much for joining us.  As Isobel said, my name is Lorie Jackson.  I'm director of ExxonMobil's global activities designed to help women advance economically.  And thank you, Isobel.  It is a great pleasure to partner with Council on Foreign Relations on the Women and Technology series.  

As many of you know, this is part of a broader effort within ExxonMobil that started in 2005 to provide women with training in business, in leadership skills, establishing businesswomen's networks and also ensuring they have access to key resources, such as technology, to facilitate their advancement economically.

And in this regard, we've had the pleasure of working with many of you in the audience.  So thank you for coming.  Thank you for the work that you do.  And we're particularly thrilled to have two leaders in the area of women's economic advancement in technology as speakers to begin this series to date, Tamara Cook and Mary Ellen, who -- both of whom Isobel will introduce more fully in a moment.

But we've had -- ExxonMobil's had the pleasure of working with Women (sic) World Banking, that Mary Ellen heads, in helping to consolidate much of the learning that they've had over the many years of experience working with microfinance institutions and crystallizing that in a women world banking-in-a-box concept that we hope will be launched later in the year.  And it will be a great resource for all folks interested in microfinance.

And we've also had the pleasure of working with the Gates Foundation in providing training to both African women entrepreneurs and advocates to help train them to be more effective agents of change in their communities.  And that was a pleasure.

And so I'm very glad that we've been able to work with these organizations, and I want to commend them for what they've done.  And I don't think it's a coincidence that not only are they leaders in the field of development but also have taken a particular interest in technology, in the role of technology in catalyzing change.

ExxonMobil began looking at the role of technology largely as a result of the fact that we are a technology company, and in our normal way of doing business, we found that technological advancements are a crucial way to provide energy to the world in an environmentally safe way.  And whenever we do a citizenship program, we look to how we can incorporate our competencies as a business into our citizenship areas, so we ask the question of what's the role of technology in advancing women economically.

And that led us to a few early steps.  One was we partnered with the International Center for Research on Women a couple of years ago to commission a study that's outside.  And I encourage all of you who haven't seen it to take a look at it.  It's called Bridging the Gender Divide: How Technology Can Advance Women Economically.  And it's a great composition of the importance of access to technology, the gap with women -- in terms of women's access, and the difference it can make if that gap can be addressed.  And they underscore the importance of women being part of a holistic cycle from problem identification to product design.  

And we used the results of this research to craft another partnership, with Ashoka Changemakers.  And it was Women, Tools and Technology Challenge, a global online crowd-sourcing challenge that began last January.  And as a result of that, we were able to identify 268 innovative ways that technologies were being used in 68 countries in the world and making a real difference.  And out of that, we selected five of them as a pilot.  

And in fact, one of the winners of that challenge spoke at the Women and Technology summit that CFR hosted last April and really ignited our interest in looking closely at that area, understanding better what the real catalyzing technologies could be.  We have been looking at three broad areas:  initially, alternative energy technology and agricultural technology, and now, broadening our investigation to look at the role of mobile technology, which, you know, brings us full circle to why you're in the room, why we've got these great speakers here today.

I am going to sit here as a student, anxious to learn and engage.  And again, thank you for being here.  And thank you, Isobel, for hosting this event.

COLEMAN:  Thank you, Lorie.  And thank you to ExxonMobil for their support of this series.

I'm not going to do lengthy introductions.  You've got everyone's bio.  I'll just briefly say Mary Ellen Iskenderian is the president of Women's World Banking and she comes out of the finance industry.  She spent 17 years with the International Finance Corporation.  And Tamara Cook is with the Gates Foundation, program officer for the Financial Services for the Poor team within the global development program of the Gates Foundation.  And she also has a long history in banking and microfinance, in particular having worked at CGAP for a number of years, and also spent a year seconded to M-PESA in Kenya -- oh, Equity Bank, I'm sorry -- with Equity Bank, the other one -- in Kenya.  And so she has some real on-the-ground experience.

And we're going to do, you know, something a little different today because of the nature of what we're talking about.  It's a little technical, and I want to make sure that we all understand what it is we're actually talking about.  So there's mobile banking, M-banking, M-finance, all these different terminologies.

But the way that I understand it is that one of the great technological revolutions in recent years has been the explosive growth in access to cell phones around the world.  People who travel in developing countries, everywhere you go, every remote pocket, corner of the world, from rural Rwanda to, you know, the boondocks of Afghanistan, people have cell phones.  And one of the challenges in the world is that -- we were just debating what the number is, is it 2.5 or 2.8, but there's 2.8 billion, close to 3 billion people in the world have no access to financial services.  And providing financial services through bricks-and-mortar buildings -- you know, it's going to take centuries to get there.  It's very, very expensive.

And so the way that financial services have grown is through access to credit, because you -- because institutions make money off of providing credit.  You don't make a lot of money off of savings, because poor people have the ability only to save very small amounts of money.  And it's expensive to offer banking when they're only saving small amounts of money.

So savings have always been kind of looped together with credit.  And credit isn't right for everybody.  And so -- and you've read a lot of noise in the press about microcredit as an industry and the indebtedness of poor people and what that means.

But one thing that Mary Ellen has taught me over the years is that for women in particular, you know, the real opportunity is through savings.  And I have seen it firsthand.  You know, I was in Egypt in January during the midst of all the revolutionary activities.  And on the very day when the Tahrir Square demonstrations were starting, I was in a small village outside of Cairo and talking to these women who are in a savings group, and understanding how empowering it is for them to be able to save money and then determine how they spend it.  It's really, truly remarkable.

But if some of this M-banking, M-money, all of these things that we're talking about, are enablers for the disenfranchised -- and many of them happen to be women in the world -- have greater access to the ability to save and therefore greater access to financial access, that it is a game changer.

So maybe, Tamara, can we start with you?  And could you kind of give us an overview of what is it that we're talking about, what is the technology, and how does it actually work?

TAMARA COOK:  Sure.  I think that starting with the terminology and figuring out the technology is an important thing, because there are a lot of words that get bandied about.  When we talk about this (piece ?), we tend to talk about mobile money.  Mobile money is essentially electronic value that can be stored on a phone.  It's generally linked to a cash-in and cash-out network.  And that's powerful.

So one of the things -- sometimes when people talk about mobile banking, they're simply referring to being able to access, check my balance in my bank account or maybe pay a bill online.  But if you've got no way to get cash into that account or out of that account, then it stops short of solving this challenge that you were talking about, of bricks and mortar and how expensive that is.

And so at the Gates Foundation, it should come in no surprise that we believe in the power of technology.  And one of the reasons in our Financial Services for the Poor team that we've decided to focus on savings and the power of technology to offer savings is because there's an historic opportunity that we've never had before:  to do something cheaper that can reach closer to where people live.

I mean, one of the problems with savings is -- and we've seen this with credit; and credit is a very valuable service, and poor people, especially micro-entrepreneurs, can leverage it in incredible ways -- people will travel far to get a loan.  They will travel far to repay that loan so that they can get the next one.

If you're only going to save a dollar, you're not going to pay $7 to get to town to save that.  And so to encourage savings, you really have to solve the problem of proximity.  And there's been lots of ways that banks and others have tried to do that.  But mobile money is one of the most proximate things we've seen so far.

COLEMAN:  Why is it a goal to get people to save money?  I mean, they're saving already.  Why can't they just keep it under their mattress or in their coffee can, as they've done?

COOK:  Right.  And it's funny because you say there's almost 3 billion people who don't access -- have access to financial services.  But they actually do.  It's just their mattress or it's the can or it's whatever.  What we've found and research is shown is that when poor people save in those unsafe ways, they often lose up to 20 percent of the value of that savings.

So poor people are willing --

COLEMAN:  They're losing it to theft or to inflation or what?

COOK:  So if they're saving in a cow, maybe the cow dies.  They're losing it to theft -- I read a story just yesterday -- or actually, last week when I was in Uganda, I heard about a woman who -- the rats had eaten up all of her cash that she kept in a purse.  You know, and it was too far to go to the bank, and so she just kept it in a hidden purse and got it out to actually go to the hospital and the rats had eaten it.

You know, and so, you know, she had saved that quite --

MS.     :  That's -- (off mic).

COOK:  -- (chuckles) -- you know, that was like six months of her savings just disappeared.  Or -- and this is -- and anybody who's traveled in the developing world knows that often many of these rural communities are very communal in nature.  And you help everybody out.  And so if you've got savings close by, it's seen as selfish not to help somebody when they're in need.  And you should help people when they're in need, but if you want to be able to save for the future, you have to get it a little bit farther away.  We call it -- even maybe from yourself.

Some people talk about an illiquidity preference for savings.  And if it's underneath your mattress, it's pretty liquid.  In fact, there were some women last week talking about their kids know where they keep their money, and the kids are the ones stealing it.  (Laughter.)  So I think it's -- I think that's -- we talk about liquidity restraint features that people want to make sure that they can protect their savings from themselves and their communities.

COLEMAN:  So Mary Ellen, you, as the president of Women's World Banking, which is a network of organizations around the world, I mean, you have an interesting vantage point because you are working with organizations in so many different countries that are at different levels of development and serving in some cases similar but also different customer bases.

So from your vantage point, do you agree with Tamara this is sort of a pivotal moment and that M-money, M-banking truly is, you know, a kind of a game changer?

MARY ELLEN ISKENDERIAN:  I couldn't agree more.  And that's not just because the Gates Foundation is providing a great deal of the funding that's allowing us to explore savings with many of our network members.  We are, as Isobel said, a network of 39 microfinance institutions of -- and banks in 27 countries.  And just last year, we crossed the line so that today, more than half of those institutions are regulated in their domestic economies and are allowed to mobilize savings.

And so being able -- I'm now repeating what's already been stated -- but being able to move those savings from informal mechanisms and sort of the other thing that gets done a lot informally in many, many countries is a -- is a rotating savings account, where a trusted person will collect money from a group of people and you -- it's almost like a lottery.  Your name is called; you get the kitty for a given month.  If you need the money that month, great.  If your emergency comes up in some other month and you don't have access to the money, then that's not very convenient for you.  And one full month of the take goes to the person that's collecting the deposits.  So it's really a very expensive, informal mechanism for savings.  And that's very commonly used in many of the countries we're working in.

So the ability to move from these informal, often very expensive mechanisms into the formal sector is an enormous opportunity.  But being able to do that at a low enough cost that it can be sustainable for the financial institution -- you know, the same reason that Chase Manhattan charges me a very high monthly fee to keep a low balance in my account is the same reason why these microfinance institutions have got to be able to recoup the cost of these very small amounts of money that come in and out of the account a lot during the time -- course of the month.  So technology really does provide a really momentous occasion to try to get the cost down.

And the only -- the only other thing I'd quickly add is that when we talk about mobile, we're -- in a lot of senses, we're talking not just about the cell phone but about any other vehicle; so vans or agents that are closer to the community, anything that can make -- bring that bank closer or that savings opportunity closer.  And this is particularly relevant for women.  And we see in so many cases that women's mobility and ability to leave the house is so curtailed.

And so anything technological or if the bank -- you know, Mohammed (sp) comes to the mountain -- can be made to bring the bank closer to the client is a huge, huge development.

COLEMAN:  So, Tamara, how does it work?  Because the issue is cash in and cash out.  So one of the things I understand is that there's now trying to basically get retailers to be that point of cash in, cash out, as opposed to banks.  So there are very few banks in developing markets, whereas there's a little bodega, a little store, a little, you know, retailer in every village, and that -- that's the idea.

COOK:  That's right.

COLEMAN:  Tell -- take us through how it actually works.

COOK:  Sure.  And maybe it's useful to look at the evolution of it.  And so what happened -- you know, most of us are probably on a monthly plan for our cellphones.  In the developing world, most people use scratch cards to buy value and load it up to their phone.  And that's essentially electronic value.  It's airtime, not money, but it's airtime.  

And what happened -- in Kenya, for example, people started using that airtime as currency, because they could send it to one another.  So if I wanted to help my mother and wanted to send her money, I -- it was easier for me to buy airtime, send it up to her, and --

COLEMAN:  Send it how?

COOK:  So it was -- it was a text.

COLEMAN:  A text.  OK.

COOK:  So an SMS.  You could -- there was a -- it was a technology that you could scratch it, put it on your phone and send it to her, or you could scratch the scratch card, text the number on it to your mother, and she could enter the number and do it.

COLEMAN:  And load up her phone.

COOK:  And load up her phone.  And she could either use that to call, if that was something she wanted to do, but there was an interesting innovation that poor -- if you give them the technology, poor people will figure out how to use it for what they need.  And they figured out how to cash out.  So somebody else wanted airtime.  You would sell them your airtime at a discount and get cash.  

And so the mobile companies realized that this was happening and that there almost an alternative currency that was developing, and they said:  If we can sell electronic value on scratch cards, why can't we sell money, essentially, to people?  We already have this existing, you know, incredible, extensive network of people who sell scratch cards, and can we use that?  

And so Kenya was really the first one to do it in any kind of scale, with something call M-PESA.  And I'm seeing shaking heads.  You guys have heard of that.  So I'm -- I don't want go too much into detail about it.

But one of the interesting things was, it ended up not being the people who sell the scratch cards that sold mobile money, and part of the reason was -- is because the business model is different.  You can actually make more money selling airtime than you can mobile money, but it was still an attractive business.  And so they developed kind of an -- now they're at 23,000.  There are -- I'm not exactly sure -- a couple of hundred banks -- bank branches in Kenya.  There are a couple hundred ATMs, post offices, post banks.  There are five times more than all of those put together agents of M-PESA now in Kenya, 23,000.  

And so when you -- when you start to figure out that I can -- I can -- and the way it works is with text.  It's exactly the same.  

And they -- one of the interesting things about M-PESA is they had to figure out how can we do "Know Your Customer."  I don't know if you're familiar with the "Know Your Customer" requirements that banks have, and mobile operators as well, actually.  You have to be able to identify the person so that you can make sure that there's no terrorism financing going on.  (Chuckling.)  I think the people who made those rules weren't thinking about everybody when they made those rules, because it's been restrictive for poor people to get access to financial services.

In Kenya they were able to basically collect an ID.  And so it's -- it's technology, but very important part of the technology is a pad of paper, where the person who takes the money writes down the name, writes down the ID number, and somebody signs.  And that piece of paper is just as important to the technology as the ability to send things over SMS.

Is that sufficient for understanding the technology?

COLEMAN:  Yeah.  Well, tell us about the players in the space a little bit more, because what -- how do banks feel about this development?

COOK:  Sure.

COLEMAN:  Are they threatened by this?  Are they partners with the --

COOK:  Yeah.  No, that's a very good --

COLEMAN:  -- with -- are they being disintermediated?  What's -- where's it -- and where's it going?

COOK:  It's a very good question.  

So every mobile money deployment in the world is backed by a bank.  We like to call mobile money a back -- a bank-backed solution.  The money is always in the bank.  When I move my money from me to you, it just moves from one bank account to the other.

That doesn't mean that my mobile money account is a bank account.  It just means that the money is in a prudently regulated bank.  And so there's no risk of the money disappearing, because it's actually in a bank.

So when Safaricom -- it's really interesting -- the founder of M-PESA was telling me their interactions with banks.  So they had this idea -- and actually, ironically, M-PESA started out as a way for a microfinance institution to repay loans.  That was the idea.  And then they realized, as they did the market research, that there was a much bigger opportunity in being able to transfer money and store value on your phone.

And so they had a meeting with all the banks, invited all the banks in Kenya to come.  And the only bank who was interested in being a partner with them at all was their -- was their current bank, who was their kind of corporate client bank.  And so they said:  We'll hold what's called the float account, which is the -- where the money is -- the actual value is held.  And so they did, and they launched.  

It didn't take more than a year for the banks to throw their hands up and say:  Wait a second.  You're trying to take our clients.  You're trying to take our business.  This is really banking.

And it was -- it was an innovative regulator in Kenya who allowed this to happen, prudentially, I believe.  And what they found was, because the money was in a regulated bank, the only risk that they needed to manage was the operational and technological risks, to make sure that, you know, when I said my money was sending to you, it really did send to you.  They didn't have to manage it as a deposit-taking institution.

Now M-PESA is partnering with minibanks in Kenya, so people can send money from their bank account to M-PESA or vice versa, including the Women's World Banking partner, Kenya Women Finance Trust, who, you know, has some complaints with the service but recognizes the value because it's a whole lot cheaper to have your clients pay through these little, tiny shops than it is through building a very expensive branch.

COLEMAN:  But the banks recognized that they were taking their banking business.  Why are they -- how are they reacting to that?

COOK:  It's interesting.  It's very expensive, as you said at the beginning, for banks to serve poor people, with savings, especially.  And so they were a bit frustrated, because when you look at the sheer volume of money that's going through it, they see the opportunity there, but their systems could not offer those same services at a price where they could charge the same kind of fees.

And so trying to figure out -- and one of the things that was -- the banks were rightly frustrated about is, mobile operators were allowed to set up agents and banks were not.

And so now the Kenya banking regulation allows banks to set up their own cash merchants, so that banks can also establish relationships with these smaller players and use a mobile phone but not a Telkom independent way of reaching.

And so it's -- when we talk about the power of mobile, it's actually the power of mobile connectivity, whether it's connecting a truck or it's a connecting mobile money or a bank's own solution.  And so it's going to be interesting to see what happens in the next few years, now that the banks can compete fairly with M-PESA.

COLEMAN:  Mary Ellen, why has the Women's World Banking affiliate in Kenya not been so happy?  I mean, what are some of the issues that have permeated this relationship?

ISKENDERIAN:  Well, I think, as, you know, Tamara alluded, one Kenyan bank really did dominate this system, and I think there's a real concern that they would lose clientele to that bank.  But as the system has broadened, the ability to lower the repayment costs, make it more convenient for women to repay their loans, they've found that there are ways -- they have to be very clever about those ways, but there are ways to retain the knowledge of your client and really make sure that you don't lose that client either to the cellphone operator, which is really the big concern -- you know, we -- Tamara and I were both in an audience where the head of Equity Bank and the head of Safari.com, the cellphone operator, were sort of patting each other on the back and being very proud of this thing that they had created, and then the Safari.com guy says:  And you know, they're my clients, you know.  (Laughter.)  And James Mwangi from Equity Bank says:  No, no, no, they're our clients.  (Chuckles.)

So I think that argument, that battle, is on the horizon, and the successful player is going to be the one that keeps a very close tab on the client, can deliver other needs through the client.  You know, is there a way that you could develop a -- you know, somehow a health care product that comes through the -- (chuckles) -- the same technology?  So I think it's staying on top of your client and Kenya Women's (sic) initial concern that they would lose that touch -- but they're smart, and they've come up with some really clever ways to segment their market and to make sure that they're really still keeping the hooks in.

COLEMAN:  Maybe take it back specifically to women.  Why is this particularly good for women?  I mean, what have you seen in practice, you know, in some of your networks about how this is creating new opportunities for them?  How are they using this?

ISKENDERIAN:  Well, I think if we're talking about savings specifically, savings is, even in places where financial roles in the household are deeply, deeply gendered -- in most places, savings is sort of a(n) appropriate role for the woman to play in the household.  So anything around savings is going to be an opportunity for a woman.  So if you can do that in a way -- and what we're finding in all of our market research as we're getting more deeply into this part of the business is that the convenience, as we were saying before, is very important.

There's been a very interesting study done on 200 clients of Opportunity International's bank in Malawi that showed that, to a very significant extent, women prized the convenience more than the men did.  And then I was shocked to see this.  We were talking about this on the way up here, that the men were willing to pay up to sort of $7.49 in bus fare to go to town, to have the flexibility to make a deposit on a Monday, even if the van showed up on Tuesday.  But that flexibility -- that convenience was more important to the woman.

The other thing that's incredibly important for women -- and Tamara alluded to it -- is confidentiality.  They don't necessarily want their husbands to know that they're saving.  They don't want their neighbors necessarily to know that they're saving.  If you are part of that rotating savings scheme and it's your month, everybody in the village is knocking on your door asking for -- (laughs) -- asking for help.  So that ability to have confidentiality can be greatly served.

It can also be harder in some -- in some countries, to keep the confidentiality through the -- through the technology.  But all of those things that women really prize about savings can be enhanced through technology.

COLEMAN:  Tamara, do you want to --?

COOK:  Sure.  Maybe I could just tell a couple of stories of women that I know who have -- I have seen this transform.  One of my friends in Kenya, who is actually an immigrant from Cameroon, moved there to study and then didn't have enough money to study, so she started a small business selling gold jewelry on the side.  And when I lived in Kenya, she used to go kind of from business to business, trying to sell people gold jewelry.  And she often did it on credit.  She spent most of her time on matatus, minibuses, going to collect the money from the clients.

The last time I was in Kenya, I had dinner with her, and during dinner, she got three payments for her small business.  And she said:  I don't have to get on the bus any more; I just text people and tell them to M-PESA me the money.  And it has radically changed her standard of living, her happiness, and just her ability to interact with clients.  And so, she can focus on selling, rather than on collecting.

I received a -- one of our partners in Tanzania, a mobile operator, is collecting stories from their clients.  And they just collected a story from a teacher who lived in a small village that had no banking services whatsoever.  She used to have to travel to town to get her salary, and it cost -- I think it was 130 kilometers, was the closest branch to her that she had to go and take it.  Now that there's an M-PESA dealer in her town, mobile money operator, she can cash out her salary there, or she can save, or she can send money to her parents, without having to make that 130-kilometer trip every month.  And so these -- you can already just imagine just saving the time and the money of that transit is really -- is really quite powerful.

We were also talking -- just one more thing is the relationship between rural and urban families.  A lot of families in Africa, and especially in Kenya, are split.  Somebody works in the city; somebody works in the rural area.  And so now people are able to send money home a lot easier.

But one of the -- there's two interesting dynamics that have developed for women.  One, women are -- have more access to their man in town, and can say:  School fees are due; send money now.  Somebody's sick; send money now.  And they will -- sometimes.  But the men also don't have to go home as often because they don't -- they used to go home to take the money, and now they can just send the money.  And so it's -- there's a breakdown a little bit in the relational dynamics between people working in the city and either their parents or their wife and their kids, and so it's -- there's two sides of the -- of the coin.

COLEMAN:  What are some of the other sort of down sides of this?  I mean, is violence, you know, an issue?  I mean, I suppose if people know that women are saving under their mattress, they're prone to theft and violence, but what about, you know, now, people carrying around a cell phone?  Does it mitigate that, or does it exacerbate it?

COOK:  You know, the one thing that helps is it's -- the way the technology works is you have to have the PIN.  There's a four-digit PIN -- or, I mean, different ones do it different ways.  And so as long as you keep your PIN safe -- and in Kenya, there were a lot of people who didn't understand PINs; they were unbanked.  The longer M-PESA's around, the more likely the people who are signing up have never had a bank account, and so they don't understand PINs.  But as long as they keep that PIN safe, then if somebody steals your phone, they can't get that money.  You just call Safaricom and say, "My phone's been stolen; here's my SIM number, here's my PIN number," and you get the value back.  I haven't heard of violence cases.

JACKSON (?):  I haven't heard of violence --

COLEMAN:  Now, we've been talking --

COOK:  Oh, sorry -- I was just in Uganda last week, and there was somebody who asked this very question at a -- at an event.  And it was really interesting.  They were saying now that cell phones are more common, they're being stolen less.  So that MTN said that they have less reports of stolen cell phones because there's --

COLEMAN:  Because even the crooks have them.

COOK:  Right.  Exactly.

COLEMAN:  Yeah.  Everybody's got one.

COOK:  It's really interesting.

COLEMAN:  We've been talking a fair amount about East Africa -- Uganda, Kenya.  South Asia is also sort of a hotbed of innovation on this, and partly I think because the governments are really encouraging it, both through regulation and this is a cost-effective way for them to administer programs for the poor -- you know, welfare programs, in effect.  And after the floods in Pakistan last year, I think M-banking, M-money, sort of took off in Pakistan.  It was a way to get relief payments to people out in remote areas without actually having to go and deliver cash.  Do you -- do either of you know some more about those examples?

ISKENDERIAN:  Well, one thing that has been really quite astonishing, that's sort of outside of the microfinance system but gets to this -- you know, to this mobile money idea -- is in India a number of really interesting models have sprung up for electronic delivery of exactly what Isobel's referring to.  Water payments, which were a huge, huge source and area for corruption:  everybody along the way, along that chain, was taking some piece of that money.  And so, by having something that literally now shows up in the little village store, and that you are the only one who can actually take that cash on the basis of some security code that, you know, you have committed to memory, is an enormous innovation, and has really, really dramatically changed the delivery of those government services, or those government payments in India.

Just on a completely different note, we are working with our bank in Pakistan on developing savings for very low-income women.  And, you know, a couple of really fascinating things have sort of emerged on that.  You know, there's always so many unintended consequences of things.  But Pakistan actually has very, very good microfinance bank regulation, but they do require, for "Know Your Customer" purposes primarily, an identification card in order to open a bank account.  And the vast majority of the women that we were working with did not have identification cards, so that's been an incredibly powerful experience.  And I've been fortunate enough to sort of be in a village when the cards came in, and really seeing women sort of acknowledging for the first time that they have an identity that's separate from, you know, daughter of their father, wife of their husband, is really quite an extraordinary thing.

COLEMAN:  But is there any -- is there any cultural resistance to giving the women identity cards?

ISKENDERIAN:  Yes, but, you know, again, we're seeing in so many of these places, once the husbands realize that the savings benefits the entire household -- what we're doing in Pakistan in particular, to the point that Tamara made earlier, is called commitment saving -- so having a prearranged goal with the woman for which she is saving.  And we encourage them to jointly form that with her husband.  And again, in Pakistan in particular savings is a very accepted role for the woman in the household to take on, so she needs the identification card in order to make that happen.

But what we're not seeing work quite so well in Pakistan as we are, say, in East Africa is, if there is a cell phone, it's maybe one to the household, and the wife doesn't always have access to it.  And so what's worked for us better there so far is more of the sort of the debit-credit card, where she alone has the PIN and can go into a local agent.  And one of the largest Pakistani banks just made a decision to open very broad agency networks.  A lot of people are very interesting to see -- interested to see how sort of far down the pyramid that organization's going to be able to go.  So it's another model, but I think has that sort of cultural implication you were saying.

COLEMAN:  Do you want to --?

COOK:  Sure.  We have a couple of investments in Pakistan, including with Women's World Banking.  But we're working with both a mobile operator and a bank, both of -- who are competing with each other.  This is something we commonly do.  We believe that competition is good for poor people because it gives them more options, and we're not really concerned about who makes the most money.

But it's really interesting that one of the bank -- which is a mobile money solution, but it's bank-led, it's not mobile-led -- did indeed pay the social payments, as you mentioned, after the flood.  And that was one of the kind of first real demonstrations of the power of mobile money for this particular bank.

And I don't know if you're aware -- in Haiti after the earthquake, we launched an innovation challenge fund to the first mobile money operator who could basically launch and have some sort of business.  And one of the things that the regulator did there, which we're really pleased about, is they allowed -- let's call it deferred KYC, basically saying you don't have to have an ID if you're going to open an account that is only this size and only transacts this much and only does this.  And as long as you stay within these parameters, which you can't do much terrorism with, then we'll let you open an account without an ID.  And so few people in Haiti have one.  

And then if you want to do more, if you want to access a loan or you want to do a larger savings, then after you've had some interaction with that, then you might have to complete the full KYC.  But that way --

COLEMAN:  Know your own customer.

COOK:  "Know Your Customer," sorry.  (Laughter.)  It's like we -- I can't tell you how many banks and mobile operators this is a daily problem with.  And we've been having conversations with the Financial Action Task Force, FATF, about this, and they are realizing that the rules that have been put into place are hurting poor people.  And so that's -- one of our biggest policy goals, is to allow this kind of tiered KYC, and that's important for mobile money and it's important for banking, it's important for identity.

One of the things about Pakistan is their regulation is quite enabling, and we're really pleased about that.  But right now because of the issues with "Know Your Customer," they're considering going biometric for the whole country.  And that could -- I mean, that sounds nice in principle, but that could be very expensive, and it -- and it could actually end up excluding the very people that you're trying to bring in.  And so it's interesting to see how government policy can radically help or hurt the financial access that we would all like to see.

COLEMAN:  OK, I'm going to open it up to your questions now.  I think I've gotten them to explain a lot here, but there's a lot of -- a lot more meat to this topic.  If you wouldn't mind just taking your name card and turning it like this, and I will try to get to everyone's questions.  And we'll start down here.

QUESTIONER:  Thank you.  I just wanted to follow up to Isobel's question and ask about mobile banking in Latin America and how it's operating there.

And then secondly, I wanted to ask Mary Ellen a specific question about microfinance in Nicaragua.  I know that it's been a very sore point for --

ISKENDERIAN:  (Laughs.)

QUESTIONER:  -- the microfinance community and for the president of Nicaragua, and if you could kind of tell us where you stand.

Thank you.

ISKENDERIAN:  Well, I definitely want you to leap in on Latin America, but at least --

COOK:  (Off mic) -- Nicaragua.

ISKENDERIAN:  (Laughs.)  Yeah, oh, gee, thanks.

At least -- what we're seeing there is actually probably less advancement sort of on the -- on the cell phone banking front but a lot of very interesting models being played out in terms of agent banking; you know, no longer having to build a bricks-and-mortar branch and a variety of different models.

What we are seeing very clearly in Latin America that we haven't seen quite the resistance in the other places that they're working is, I'll pay my loan back through an ATM, I'll pay my -- I'll pay my utility bills, but my savings, gosh, I just don't really feel entirely comfortable putting that into, you know, a black box with my -- the woman who runs the bodega.  And there's been a real resistance.  And so we've really found that marketing -- and marketing that really explains what's happening and very much, you know, sort of takes the client by the hand -- has been very important for the work that we've been doing in Latin America so far.

And then just quickly on Nicaragua, Nicaragua is probably in some ways sort of the thin end of the wedge, or the first indicator of what real political interference in microfinance can do.  There was, going in the run-up to an election, a determination made by Daniel Ortega that if you had a microfinance loan, you were in fact initially told you could not; it was illegal to repay that loan.  And so you can imagine, you know -- (chuckles) -- the repayment rates --

COOK:  Yoo-hoo!

ISKENDERIAN:  -- plummeted.

COOK:  Right.

ISKENDERIAN:  Yeah, exactly.  There was a quick backtracking on that, and in some states the officials recognized that, you know, people needed to repay those loans because they needed to take the next loan and that that was such an important part of their financial lives that it was sort of in -- there was repeal of this -- what's called the "No Pago" in many different parts of the country.

But the damage was done, and it was really an indication.  There was a lot of, you know, looting and burning of microfinance branches and a real sort of politicization of microfinance.  And I think, you know, quite frankly, a lot of what we've know seen happening in India is -- I don't think it was driven by Nicaragua, but it is mirroring it to some -- to some regard.  

And when we talk to our network members, I think it's been a real coming of age in the last year for them to realize, you know, the political implications that they may not have always paid as close attention to as they should have.  It's a very powerful -- you know, very, very powerful way to generate votes amongst that population.

I don't know if you want to talk about Latin America.

COOK:  Yeah, let me just jump on that.  In some ways, Latin America is hurt by how far ahead it was in financial inclusion.  In the United States, we don't need mobile money.  You and I can do the banking things that we need either on the Internet, with the cards in our wallet or in other ways.  Latin America has more banks than Africa, and so the need for mobile money was smaller.  

That being said, we're seeing some developments, with Telefonica, for example.  Brazil's kind of coming on to seeing the value of this.  But to be frank, it's less needed because of some of the things Mary Ellen was talking about.

COLEMAN:  (Off mic.)

QUESTIONER:  Hi.  I was in Haiti last week, where I attended an event with 55 female entrepreneurs.  And these were -- I mean, we're not talking about handicrafts.  I mean, these -- I met women who were running pharmaceutical companies, construction companies; really amazing, dynamic women.  And the one thing that they kept saying is, you know, talking about finance and talking about how did they scale up the businesses that they have.

And then on the flight back from Haiti, I was really Dean Karlan's new book, "More Than Good Intentions," where he talks about randomized trials and he talks about microfinance and the effect that women are taking these loans, but how -- what are they doing with it in terms of becoming entrepreneurs and scaling up their businesses.  The studies that they've done, it shows that they're not scaling up their businesses, they're not good entrepreneurs, and it's becoming an impediment.

My question -- my question to you is, how do we solve that?  How do we -- how do we bridge the gap where you clearly have women who are able to scale up the businesses who are looking for the finance?  And then also, I mean, clearly women who are taking microfinance loans are capable of starting a business.  How do you get them the entrepreneurial skills that they need in order to get to that level?

ISKENDERIAN:  Well, I beg the audience's indulgence.  You have to let me talk about randomized control trials for just a moment.  (Laughs.)

MS.     :  Please do.

COLEMAN:  And we have Dean Karlan coming to speak here.

MS.     :  Oh, really?  Do you know when, (actually ?)?

COLEMAN:  No, sorry.  Sometime soon, in the next couple weeks, about his new book.

ISKENDERIAN:  Yeah, we're all so hungry for, you know, clear data on whether there is impact and where there is and isn't impact.

I just do feel like a couple of the fundamentals of the methodology that's used in these randomized control trials really have to be called out.  They are typically studies that are done over an 11-to-14 month period.  And that is a -- in the world of poverty and moving people out of poverty and building businesses, that's a very, very short period of time.

In the Women's World Banking network, all of our network members, interestingly, say they -- you don't really see anything that looks anything like change in less than three loan cycles, which is typically two and a half to three years.  And, you know, in so many cases the first loan, the woman has to give it to her husband because he's not really crazy about this idea anyway, so she kind of has to buy him off with the loan.  So maybe you're not even measuring three loan cycles.  Maybe you're only measuring one and a half or two.  So I think that the time scale is really important.

The other thing that they typically do is measure everything against consumption.  And again, what all of our network members are sort of reporting back in their own impact work is that the changes that you see after those three loan cycles are things like the move from a mud floor to a wood floor.  And, you know, anybody who's sort of looked at the health impacts -- you know, dust in the eyes, dust in the lungs, I mean all the, sort of, cookstove arguments that many of you've heard -- a huge difference that  can be made in the well-being of the family from that move.

Another incredibly important and long-range impact that you often see after that first loan cycle -- first three loan cycles is the decision not to take a girl out of school in order to supplement the family's income; that there's enough additional money being generated that the girl can stay in school.  And, you know, this audience knows well the incredible impact of keeping a girl in school for longer.

So I just -- I feel like as a backdrop to the answer to your question, you know, looking at what's actually being measured and how it's being measured in those trials is super-important.  

Having said that --

MS.     :  If it makes you feel any better, I've read the book for -- I'm doing a review for Forbes, and it's not going to get a good review -- (laughter) --

ISKENDERIAN:  No, no, no, you didn't see me do that.  (Laughs.)  But I just do think the story -- you need to sort of widen the lens a little bit when you tell the story.  

But in terms of -- you're absolutely right, the additional business services that women entrepreneurs, men entrepreneurs need in order to grow their business are a huge conundrum that we face, because microfinance has always been so predicated on sustainability, recouping all costs, and that kind of service typically is not something that you can do on a sustainable commercial basis.  So what we've started to see working quite well with our institutions that have made the shift from NGO to regulated institution is they keep their NGO, that original institution, really close to the bank.  They keep them as shareholders.  They allow that organization to take grant money to provide those kinds of non-commercial support services that can actually build clients.

And so what you're actually seeing in microfinance -- and we've just done these numbers for our network -- and I was really very excited to see this -- in an industry that's on the whole moving upscale and to larger businesses and larger loan sizes, in the industry-wide you're seeing that really women are being displaced by larger men's businesses getting those larger loans.  At least 39 institutions in our network who are, you know, very committed to focusing on women are making larger loans to larger women's business.  We've had our percentage of women borrowers increase in the last two years from 75 percent to 82 percent, against an industry trend very much going the other way.

So, you know, if you're really focused on women, you can still do that.  So I'm actually hopeful for the microfinance institution to gradually be able to -- industry to be able to move upscale.

I don't know if -- do you have anything on this?

MS.    :  We work mostly on (savings ?).  (Laughter.)

COLEMAN:  Howard.

ISKENDERIAN:  That was a long answer.

QUESTIONER:  Thank you.  Thank you very much.  What prompted me to ask a -- make a comment and ask a question is -- (inaudible) -- think twice about, you know, the counterterrorism issue -- (inaudible).  I'm with U.N., and the concern there is we work with central banks to make sure they have financial intelligence units, make sure the banks have a banking system that can control the banks.  You're looking at this from totally the -- you know, from the ground up.  

The only system that actually exists from the ground up, that FATF has been working on for a long time, is the question of hawala.  I mean, people would go to a local money changer and then they would somehow communicate, by telex or whatever, and send money to somewhere else, either within the country or much further away.  

This is a tremendous way to replace the hawala system and regulate it, but it's going to take a long time.  And it can only work, I think -- and, you know, we work with the Financial Action Task Force both on this issue and charities and a whole host of others, but this has been a particularly knotty issue to deal with.  But it only can work in countries that regulate their own banks.  And there are so many countries that don't even do that.  

So I imagine -- my question is, I imagine most of your work is in countries where the banks are fairly regulated by the central government, through whatever system, through a central bank, financial intelligence units.  

And secondly, you know, would you comment on how you're replacing hawala around the world?

COOK:  Sure.  One of the things that we've -- one of the conversations that we've been trying to have with central bankers and with FATF and others is, more information is better than less.  Cash is the enemy of counter-financing of terrorism.  And anything we can get to shift cash to electronic value is better.  And so, for example, the tiered KYC -- "Know Your Customer" -- that I was talking about, if you can shift a whole bunch of transactions that used to happen via cash or through hawala -- I live in Seattle, I could send money to Somalia from my neighborhood without anybody knowing --

COLEMAN:  Does everybody here know what hawala is?

MS.    :  No.

COLEMAN:  Do you want to just explain it quickly?

COOK:  You could probably explain it better than me.  It's an informal system in the Muslim community of being -- basically transferring money.  It's based on trust.  They use satellite phones or cell phones to transfer money, a lot of money, around.  We don't have any specific projects -

COLEMAN:  You go -- literally, you go in to your local hawala dealer, vendor, and it's all on trust.  And you say, I want to transfer.  They take 10,000, and then they have a counterpart in Somalia who they trust, that you don't know and you've never heard of, and they transfer the 10,000, and both people take a fee.  And it works.

COOK:  It works.  It's very efficient.  So what we're telling them is if you have -- two things, if you can move more transactions to electronic, and if you have the ability to turn off an account if something suspicious is happening.  So that's really striking a chord with regulators because they're saying, you're right, most transactions under a hundred dollars, let's say, are not really the -- that's not really our target.  But if we have the ability to see what kind of transactions are happening, so you can see if all of a sudden one account's getting lots of payments, or whatever, you have the ability to turn that off, that's much more powerful than allowing what is generally an informal thing.

This really -- I had no idea that this would be such a big issue, but every banker -- bankers are conservative, period.  I know you're -- I know the financial crisis would beg otherwise, but in the developing world most bankers are quite conservative.  And so they are very hesitant to do anything that would upset the bank of Uganda or the central bank in their country.  And the central bank in their country is very hesitant to do anything that might upset FATF or the United States.  And so we just need to make sure that poor people can get the access they need and that regulators get insight into more transactions than they used to have.  And it's a win-win.

COLEMAN:  Dana (sp).

QUESTIONER:  Thank you.  I have a question about the illiterate population of the developing world.  And I'm thinking particularly of Afghanistan, where we're piloting some projects involving e-learning technology, voice activated through cell phones.  And I wonder if in the mobile banking area, which is also taking root there, I know, if you've explored or are using or piloting technologies for illiterate people to be able to bank.

COOK:  Sure.  You know, it's amazing what people can learn when they have -- when they see the value in it.  There are a lot of people who are illiterate, inumerate, but they can figure out how to memorize a four-digit code.  They can get a nephew or a niece or a son or a daughter or someone to help them figure it out.  

And so we all thought that technology barriers would be bigger than they have been, and so -- because there aren't many things you have to know how to do.  But that being said, there are some operators that are looking at voice recognition technology and some of those kinds of things.  But surprisingly, that has not been the barrier we expected it to be.

I think the bigger barrier is trust.  I met a woman last week who had registered for mobile money, she had a bank account, and I said:  Hey, wouldn't it be great if you could use mobile money to send money to your bank account?  She said:  No.  And she couldn't read; she couldn't write.  And I said:  Well, why not?  I mean, there's a mobile money -- you know, literally, like, I can see the mobile money shop right here.  You could just walk down there and you could deposit.  She said:  I want to go to the bank.  I want to see the guy that I give my money to, so that if it's not there when I get back, I can come and I can say, that's the guy I gave my money to and I gave him this much.

And so it's really -- the barrier of trust is a much bigger barrier than illiteracy, is what we're seeing.  

QUESTIONER:  I'm a research scientist and I've been talking with colleagues in Africa and we have this issue of broadband access.  And so the government usually is moving very slow towards that because it's basic research, usually.  And so now I'm intrigued that there's all this M-banking going on, because I hope it means that there will be more Wi-Fi stations and eventually building capacity in terms of science and technology for more sort of basic research to happen at universities.

Are you seeing this kind of spin-off community happening as a result of the fact that now that money is involved, politicians care more and so they will build the station and maybe the scientists can get access to it as well?

COOK:  I'm not sure of the answer to the question.  I do know that, mobile money or not, mobile technology is growing and, you know, GPRS and, you know, just a lot -- you can do a lot more on your phone than you used to.  But I don't know the answer.

ISKENDERIAN:  And all I would add to that is that we are very definitely seeing women in the field say, you know:  I don't really -- I don't have any illusions that my village is going to be electrified, but I have to have a place to charge my cell phone.  (Laughter.)  So, you know, it is really becoming the need.

COLEMAN:  And how are they doing that?

ISKENDERIAN:  Oh, there's some -- there are some amazing technologies that set up these, you know, solar-powered charging centers in the middle of villages.

JACKSON (?):  Solar power.  Solar power.  So that's where the basic research is coming along, to meet the need for the mobile banking.

COOK:  I was in Liberia a couple of months ago, and a mobile operator there did something which I thought was incredibly innovative.  They have to power their towers, and they normally have generators -- and sometimes they're moving towards, you know, green technologies, but generally it's a generator.  But it generates more electricity than they need.  And so they basically gave the security guard access to the excess electricity that he could sell to people -- and you know, just basically have little plugs; they could come in and charge their phone.  And what it did was it provided extra protection for that tower, because nobody was going to touch that or vandalize it or whatever -- (laughter) -- because that was the place not only that, you know, I can get my cell phone signal from, but I can now charge my phone.  And so it's really interesting, when you start to look at what do people need.

ISKENDERIAN:  Right.

COOK:  How can we meet those needs in creative ways?  Mobile just really opens up a whole bunch of new opportunities.

JACKSON (?):  You know, I'm really excited, because I think it opens a lot of opportunities for scientists in general to get global access and get on the web and WiFi as well.

COLEMAN:  Susan.

QUESTIONER:  Just one comment about -- from Elmira's (sp) question.  I could make the argument that we may have questions about the women and their entrepreneurship, but I think in a way a mother is an entrepreneur.  She's going to reinvest in her -- the quality of life at home and in her daughters going to school, so that's a -- down the (ride ?), in terms of how you measure that.  It's not 14 months; it's a little longer period.

And then, my question was you mentioned -- I think it was you, Mary Ellen -- that this technology is sometimes an opportunity used for other things like -- I think you used the phrase "health products," or something.  I didn't know if you meant telling women about where they can have access to health services and information, or what you meant.  If you can -- and then there's the whole advocacy kind of topic.

ISKENDERIAN:  I threw it out more as, you know, sort of the great next need that I am convinced is a powerful way for microfinance institutions to maintain that touch to their clients.  You know, what we see time and time again is that, you know, if a woman is economically empowered and has the money, she will go out and buy her health care, she will go out and pay that school fee.  She -- you know, there are needs that she can meet once she has the economic empowerment.  And so when microfinance institutions worry about losing a client, you know, we try to talk to them about meeting other needs that might be possible.  And health, particularly when you're talking about women, becomes the next unmet need.  And I wish I -- I wish I knew exactly what that might look like.  But I don't know if you're seeing anything like that.

COOK:  It's not my area of expertise, but I'm just aware of other work within the Gates Foundation that is leveraging the power of mobile technology for other areas that we care about -- for example, agriculture.  Being -- you know, having access to a phone, I can get crop prices, I can get weather predictions, I can get all kinds of things.  There's a project that we're doing with an organization called AppLab in Uganda that is using that.

There's also interesting technology to do health monitoring.  There's things that you can plug into the phone to even do things like blood tests.  And all of a sudden, it just opens up a whole world of possibilities.  You know, you can ask how much does your child weigh, or whatever the thing is.  And so we, at least as a foundation, are looking at the power of mobile as so much more than just a technology.

COLEMAN:  That's true in this country, using, you know, mobile texting to remind people to take their medications, all sorts of things; which is a multibillion-dollar health problem here.

So, Rama (sp).

QUESTIONER:  I just wondered whether there's been any conspicuous effect on corruption through mobile banking, especially in developing countries -- administrative corruption, civil services?

COOK:  So Mary Ellen already talked a little bit about how the transparency of an electronic transfer can reduce the middle man, and I think that there is a lot of power in that.  But the flip side of that is in Kenya police officers will often ask for a bribe by M-PESA, so -- (laughs) -- you know, I mean, it's transparent and easy and a lot easier to do than it maybe used to be, but I do think that -- the thing that I was saying earlier about illiquidity --

COLEMAN:  They're -- so they're asking for you to just pass them the M-PESA --

COOK:  M-PESA them.  (Laughter.)  Yeah, "M-PESA me."

COLEMAN:  "M-PESA me."

COOK:  A hundred bob'll do it, you know.  (Laughs.)  I don't want to -- I mean, I'm not saying it's a common, everyday occurrence, but --

COLEMAN:  Isn't that -- isn't that trackable?  I mean, isn't that the whole --

COOK:  Yes, it -- conceivably.

COLEMAN:  But they don't care?

COOK:  I mean, I --

COLEMAN:  Yeah.

COOK:  I mean, I don't have any research or data to show the prevalence of it.  I've just heard of it.

COLEMAN:  That's amazing.

COOK:  So efficiency in all areas of payments.  (Laughter.)

COLEMAN:  Audacity.  Love it.  (Laughter.)

But I -- I mean, in Pakistan with the floods, I mean, that was one of the big issues, is they really wanted to get money directly to the people who needed it.  And it's really hard to do that in a place where, you know, they couldn't -- they could only land helicopters on strips of land.  I mean, they couldn't get there physically.  And they knew that if they sent it to the, you know, district headquarters, by the time it made its way down to the village level there'd be 5 percent left of whatever they were sending.  And so this -- you know, using and experimenting with this is a way -- you know, I think it's got enormous opportunity for, you know, disaster relief, emergency, refugee communities, all sorts of things.  We know of the problems.

I mean, I think this is one of the huge areas of opportunity, because we know of the problems of corruption and of being in a -- to your point, Tamara, that cash, you know, is the enemy, you know.  And being able to actually deliver the money to exactly who we are trying to get it to, I mean, this could be one of the biggest breakthroughs.

COOK:  It's a huge breakthrough, but it's not as easy as we're making it sound.  You know, I was in Democratic Republic of Congo last year, and the U.S. government is actually trying to encourage mobile money because of -- exactly because of a lot of the corruption that happens in payments.  And I heard a story about some teachers who live far away -- second teacher example.  But to pay them, they literally had to hire a plane, and the army flew the cash to this community to pay the teachers.  You can only imagine how much money these kids were getting -- I mean, the teachers were actually getting.  None.

So, what did the teachers do?  If you want us to teach our kids -- your kids -- then you have to pay us.  So, you know, all of a sudden, the military is keeping the cash; the teachers need payment; so they ask, you know, these poor families to pay.  And so the U.S. government said:  Ah, if we only had mobile money, it would be a magical way to pay these teachers.  But how are you going to get the cash to that community?

Liquidity is one of the biggest challenges of mobile money.  You know, M-PESA agents in Kenya are often having to rebalance their -- either they've got too much cash in the till and they've got to go to the bank to get electronic money, or they don't have enough electronic money to be able to transact.  And they're going to the bank two and three times a day to rebalance.  And so it's beautiful, but the cash is still the biggest challenge.  And so I just -- I don't want to leave us thinking that we've found the solution when --

COLEMAN:  Yeah, because the -- I mean, just so we all understand what you're talking about, so I understand what you're talking about, the problem with the teachers, right, is you can, you know, M-PESA -- I love this new verb -- M-PESA them -- (laughter) -- but eventually they -- somebody in the village needs cash, right?  Or everybody needs to be on the same system.

COOK:  Right.  I mean, ideally, in an ideal world, you'd just shift everything electronic, right?  If you could just get it so that you could M-PESA them the money, and then they can pay for their food with it and they can pay for their rent with it and they can do whatever.

COLEMAN:  Right.

COOK:  The pricing of mobile money does not encourage payment for face-to-face services.  It solves the problem of remote payments.  But because of the way things are priced right now, it's priced --

COLEMAN:  It's too expensive.

COOK:  It's more expensive.  It's a better alternative to money transfer, but it's not a better alternative to paying the person standing in front of me in cash.

And so one of the things that we've been trying to do is to get operators to specialize on being a payments platform, not a money transfer service, so that the price comes -- so that the volume goes way up -- because there's a whole lot more payments if you do face-to-face -- the prices come down, and they still make more money.

COLEMAN:  But do you reach a -- I mean, where -- when do you reach a critical mass?  Because I read that in Kenya M-PESA is doing more transactions than Western Union all over the world, by a factor of something.

COOK:  Absolutely.  I don't have the statistics on me, but it's pretty impressive.  And it's a whole lot of money that goes through it, but it's still just a fraction --

COLEMAN:  A fraction.

COOK:  -- of the GDP of Kenya.  And so, you know, if you could shift purchases and things like that to M-PESA, you would see the volume go up.  One of the problems with Safaricom is their IT system physically can't handle the additional volume that would come about with that -- a move to that kind of a system.

And so that's one of the things you have to think about is, you know, technology is powerful, but when you have a lot of things that have to go over one system, it's hard.

COLEMAN:  Heather.

QUESTIONER:  Thank you.  I'm actually with the Grameen Foundation, and you were actually visiting my team in Uganda last week.

COOK:  Yes.

QUESTIONER:  So it's great to hear about that.  So I'm responsible for the mobile agriculture and mobile microfranchise work we do in Indonesia.  And, you know, we as Grameen used to think about these verticals like agriculture, general microfranchise, health, mobile financial services; but more and more, it's becoming clear that you maybe start developing solutions in each vertical area but that mobile financial services is clearly a horizontal that will cut across all of them.

So I'm curious to hear from both of your perspectives, where do you see some of those new solutions really lying at that intersection between, say, health and mobile financial services or agriculture and mobile financial services?  Are there integrated solutions?  I mean, people talk about, for example, mobile microinsurance.  Do you see those as being viable?  Do you see there being a lot of barriers to trust?  Just wanting to hear some thoughts on those areas of intersection.

COOK:  Sure.  I think there's a ton of opportunities in that.  We haven't -- we don't necessarily have a stream of work that's looking at that integration, but you can't get around it.  You know, in Ghana, there's a life insurance, which -- life insurance has limited value, but it is a valuable thing -- that a company in -- I mean, one of the mobile operators is basically for every time you top up, you get a little bit more life insurance.  And it's become a way to maintain clients.  And people really like it.  They like to check how much life insurance they've now got.  And so it's an opportunity for a service that maybe they wouldn't have gotten otherwise.

The other thing, I would say -- and again, we really focus on savings.  And a lot of agricultural finance has really focused on credit, which is important and valuable, but if you can -- if you can help farmers capture their savings at harvest time when they have lots of money and lock it away until they need it for planting, it's a lot more cost effective than borrowing at planting time.

And so I think mobile provides an opportunity and electronic payments in general, the ability to make a decision before the cash is in your hand -- you know, it's like -- that's why the government takes taxes out of our paychecks, right, because it would be harder to write that check at the end of the year -- having had to do that.  (Laughter.)

You know -- so I think that's -- but there's a ton of opportunities.

ISKENDERIAN:  No, it's an incredibly fertile time, I think.  I just said it in another panel this morning that, you know, sort of after the big innovation of microfinance, you know, 35 years ago, we've been slow to innovate and that had been such a mono-product field.  So I think it's very exciting, the opportunity.  And I think -- I think technology has kind of been, you know, the match or the catalyst to light that.

We are exploring -- you know, since maternal health is so much of the issue -- and in a lot of ways, insurance isn't really the right product to deal with maternal health.  For the majority of women, when they become pregnant, you know what the outcome of that pregnancy is going to be.  Insurance is much more suited to an unexpected outcome or something that you're not anticipating.

So I think there is absolutely some room, and I've heard about one small product --

MS.     :  (Off mic.)

ISKENDERIAN:  Yeah, in Kenya --

MS.     :  In Kenya.

ISKENDERIAN:  -- yeah, that's basically a top-up card for maternal health.  When a -- when a woman becomes pregnant, she sort of saves a little bit every month toward the cost of an attended birth.

So I think there's lots and lots of exciting possibility.

COLEMAN:  Richard, did you have a question?

QUESTIONER:  Sure.  (Laughter.)  I'm going to ask a question as a devil's advocate and a technology Scrooge.  (Soft laughter.)  I feel oppressed by technology; one, because I'm old; and two, because I sometimes feel like I work for Microsoft.  I have to be my own -- I have to be my own spreadsheet guy, I have to be my own scheduler, I have to -- and so on and so forth.

So -- and then I see the way my kids use technology with their twits (sic) and their text messages and so on.

My question has to do with the individuation of society due to technology.  You mentioned at the outset the importance of the communal system in many of these villages, and -- which I assume has achieved outstanding efficiencies over time for poorer villages.

So here comes a highly individualized technology.  What impact is that having on the communal system, positive or negative?

COOK:  Maybe I'll just start.  I think that there are both.  One of the things that we've done is we've done -- we've commissioned some research to look at -- I don't know exactly what to call is -- basically human relations as it relates to money.

One of the things technology enables is it enables people to leverage their communal relationships further.  So if I'm stuck in my community -- and -- because I don't think it takes away that communal part of society -- if I'm stuck in this village and I need help, but something happens and all -- everybody in this village is hurt or, you know, there's a disaster that strikes the village, they don't have out -- links to the outside world.  But with technology, it enables, I know him and then he knows her, and if she knows him -- and if there's a way that you can use technology so that basically your, you know, contact lists merge -- and I've never met Lori (sp) before, but she and I can basically look at our phones and see if anybody we know -- are -- know in common.  And then I can call the person and say, hey, do you know Lori (sp)?  Okay, is she safe to transact with?  Yes.

And so, I think that there are -- the other thing that we were talking about just on the way here is that technology enables people to be in touch more.  So if I have a need and you live 10 kilometers away, it's easier for me to get in touch to have that help.  But the same -- but I talked earlier about the downsides.

QUESTIONER:  Let me just -- a quick follow-up.  If a village has one tractor, for example, and now you have -- and the village has a hundred families, but now you have a hundred families all saving for the floor or the kitchen implement or this, what happens to the communal tractor?

COOK:  It's a good question.  And one of the -- I don't know of a story of a communal tractor, but I do know of a communal water pump.  And in Kenya, that is basically turned on or turned off by paying M-PESA.  And they found that it -- the water pump serves the entire community.  And they couldn't -- nobody could afford to have it themselves, but they can basically text their contribution for this communal thing.  And then it turns it on for however much money they've basically texted it for.

And so I think there's ways that we can reimagine community and enable -- technology enables us to do things we couldn't have done to take that community further.  But, I mean, we're at a time where it could go either way, right?

Mary Ellen.

ISKENDERIAN:  And I guess all I'd add to that is, you know, with so many of the women that we're working with, they are so devalued and so disempowered, unempowered in the current scenario.  And we've seen ample evidence that when a woman becomes economically empowered and can start to be a -- more of a voice in that village, the village decisions tend to be more public-good related decisions.

So it -- you know, it may be a couple of steps to your -- to your point, but I'd argue that if the technology can empower that woman to have savings in her own name that empower her to take a next step to political empowerment, that perhaps she'll vote in a more public-good oriented way in a village council, for example, which she wouldn't have even had access to or have thought to have run for before she was economically empowered.

COLEMAN:  You know, Richard, I think it's an interesting question.  And I don't think that I'm sort of starry-eyed about any of this.  I think that there's -- there are downsides, and the interesting downside, as Tamara mentioned, is, you know, husbands go to visit their wives less or children go visit their parents less frequently.  And, you know, it does break down bonds, and there's a downside to that, certainly, but there are also lots of upsides, and some of them we haven't even conceived of.  You know, so -- Daniel.

MS.     :  (Off mic) -- be surprised.

QUESTIONER:  Thank you.  This exchange -- recent exchange leads me to (perhaps begin ?) to come back to the problem of evaluation, which -- on which Mary Ellen was eloquent.  And from long experience in health care and population health, I could extend your list of the lack of communication between -- among the investigators, the people who know program and, most important, the participants on the ground.  And so what you identified are sort of garden-variety problems in trial design and in conducting systematic reviews, where the meta-analysis of crap is crap.

And so let me ask, from my ignorance of this fascinating subject, but my intuitive understanding of how it relates to opportunities to improve health -- let me ask how to explain the disconnect in the research, because obviously the research is crucial for you to get resources to expand the good work.

ISKENDERIAN:  We've -- (inaudible) -- these things.

COOK:  We've invested a lot, a lot of -- a lot in research.  It should come as no surprise that we're a data-driven organization.  And we found actually -- and we -- I can't answer the questions about credit, because we really haven't done very much in credit, but we've commissioned a lot more randomized controlled trials around savings, because there's actually a dearth of knowledge around what savings can do.

And one of the interesting things about savings is I think it's -- you see -- you see smaller impacts quicker with savings than with credit.  And so there are a couple of really interesting randomized controlled trials that looked at -- for example, in Malawi, farmers were given the opportunity to save at harvest time and commit to save at harvest time.  And those that did, you know, increased their fertilizer use, increased their yields, increased their family income.  And it was no more -- they didn't make any more money that year.  It's just that they locked it away and didn't use it for something else.  And so I think, you know, we're starting to see those kinds of things.

The other thing I would say is that beyond randomized control trials, there's just data collection that can be done about usage and correlations with poverty levels and other kinds of welfare benefits, such as health or education.  And so there are financial diaries, which I think you mentioned, which, you know, on a daily or weekly basis meet with families to find out, how exactly did you spend your money this week.  How did the financial services that you have enable you to do something different than you might not have been able to do?

And so I am going to make one book plug.  And if you read only one book, it's "Portfolios of the Poor," and it basically says poor people manage their finance much better than we do, with many more tools than we do, because they don't have the options.  And if they don't, they will die.  Poor people do not make two dollars a day.  Poor people make on average two dollars a day.  Some days they make 20 (dollars), and then for 13 days maybe they make zero.  And so if poor people don't have tools to save, they won't.

Sorry.  That was not exactly what you asked, but I got my book plug in, anyway.  (Laughter.)  And we didn't publish it or anything.  I have no -- I benefit not from it.

COLEMAN:  Who's the author of that?

COOK:  It has several authors:  Stuart Rutherford, Daryl Collins, Jonathan Murdoch and, I think, somebody else.  But excellent book.

COLEMAN:  Well, I think we are just about out of time.  I think this was a great way to start this session on women and technology.  It wasn't only about women, but it was a lot about technology and a lot about some innovations in development today, which ultimately none of these issues are really just about women.  They're about the whole community, but women are clearly a very underutilized and underinvested-in component of many different societies.  So I think it's appropriate to have a focus specifically on women.

The Dean Karlan meeting is 5:00 to 6:30 on Wednesday, May 11th.

And there's also -- we just added an article to the desk outside of one of my colleagues.  Jagdish Bhagwati has just written an interesting piece looking at Grameen and SEWA and microfinance.  So I encourage you to pick that up on your way out, too.

Thank you so much.

COOK:  (Off mic) -- one more.

COLEMAN:  Oh, yeah, please.

COOK:  I made available just one spread -- one page from a presentation that I -- that I give that talks about partnership models.  And our kind of mantra is do what you do best.  Let the mobile operators do the communication bit; let banks and microfinance institutions do the financial services bit.  And so it just --

COLEMAN:  It lays that out.

COOK:  -- a pictorial description of that.

MS.     : Is that outside, Tamara?

COOK:  It is.

COLEMAN:  And that's outside.  

And so join me in thanking both ExxonMobil for sponsoring this event, Tamara Cook and Mary Ellen Iskenderian.  (Applause.)

Thank you.


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