Update from Cash Essentials

Reply on DGroups | 2 comments

Digital finance / mobile money in Africa

March 15, 2022, 7:15 a.m.

James Shepherd-Barron

Dear fellow CaLPers and MiCers.

Here are recent highlights from academic and cash industry sources that you
might find relevant for your cash and markets-based programming.

With thanks to Prof. Batiz-Lazo of Northumbria University, the NEP Project (
http://nep.repec.org), Currency News International, The Payments Journal,
Cash & Payments News, ATM Marketplace and Payments Afrika.

*Abay et al: Digital tools and agricultural market transformation in
Africa: Why are they not at scale yet, and what will it take to get there?;
International Food Policy Research Institute Discussion Paper 02092,
December 2021*
Despite enthusiasm on the potential of digital innovations to transform
agricultural markets in Africa, progress made thus far has been limited to
small-scale experiments that often fail to scale. This paper reviews the
theoretical and empirical evidence on the transformative potential of
digital innovations for African agricultural markets.
For more, see:
https://ebrary.ifpri.org/utils/getfile/collection/p15738coll2/id/134957/filename/135168.pdf

*Yue et al: The rise of digital finance: Financial inclusion or debt trap?
Finance Research Letters; https://doi.org/10.1016/j.frl.2021.102604
<https: 10.1016="" doi.org="" j.frl.2021.102604="">; 30 December 2021* Digital
finance has a huge potential to serve people excluded from the traditional
financial system by reducing the information asymmetry between lenders and
borrowers, decreasing transaction costs and achieving economies of scale.
However, as digital finance evolves, populations with lower financial
literacy gain access to complex financial products and services, some of
which carry risks that may not yet be known. Recently, the substantial
increase in household debt has become a threat to the world economy and it
has been asserted that this may be caused, at least in part, by digital
finance platforms such as mobile money apps which damage financial
well-being by triggering impulsive consumer behaviour. While digital
finance has brought financial inclusion, it has also increased the risk of
households falling into a debt trap. This paper provides evidence that
supports this notion and explains the channel through which digital finance
increases the likelihood of financial distress.
For more, see: https://arxiv.org/ftp/arxiv/papers/2201/2201.09221.pdf

For a wider perspective on Cash and Crises, see:
https://cashessentials.org/cash-crises/

*James Shepherd-Barron MIH, PhD (hc)*
*Disaster Management Consultant* (*in case you're wondering, this means I
advise Governments, UN Agencies, International NGOs and the private sector
on the modelling and management of international disaster risk*)

I am also an Adjunct Professor at Fordham University and CEO of The* Aid
Workers Union*, the support service for independent aid professionals (
https://www.aidworkersunion.org)

Mobile: +44 7785 70 34 90
Skype: james.s-b
Twitter: @jshepherdbarron
https://www.aidworkersunion.org <https: www.aidessentials.org="">

- DREAM BIG - Demonstrate vision and insight
- BE BOLD - Have the courage to take risks and make tough decisions
- OWN IT - Take full accountability for your decisions and actions
- WORK AS A TEAM - Don't just coordinate, collaborate
- DO THE RIGHT THING - Conduct yourself with honesty and integrity at
all times
- SHOW RESPECT - Treat others as you would expect to be treated
- LOVE WHAT YOU DO - Bring passion and pride to what you do

The information contained in this e-mail message may be privileged,
confidential, and protected from disclosure. Any unauthorised use,
printing, copying, disclosure, dissemination of or reliance upon this
communication by persons other than the intended recipient may be subject
to legal restriction, sanction or redress. If you think you have received
this e-mail in error, please reply to the sender to that effect and delete
this email promptly.

Please note: This email has been checked for computer viruses, but be
aware that this service is not 100% reliable. Do not open any attachment
unless you have specifically requested it. The sender bears no
responsibility for any such transmission.</https:></https:>

Feb. 24, 2022, 10:07 a.m.

James Shepherd-Barron

Dear fellow CaLPers and MiCers.

Here are CashEssentials’ recent highlights from academic and cash industry
sources that you might find relevant for your cash and markets-based
programming.

With thanks to Prof. Batiz-Lazo of Northumbria University, the NEP Project
(General information on the NEP project can be found at http://nep.repec.org),
Currency News International, The Payments Journal, Cash & Payments News,
ATM Marketplace and Payments Afrika.

For a wider perspective on Cash and Crises, see:
https://cashessentials.org/cash-crises/

*Grotta: BofA and Regulatory Agencies Feud over Prepaid Cards for Benefits;
Payments Journal, 23 February 2022*

During the height of the pandemic, social protection payments made via
prepaid cards in the U.S ballooned. Nearly every state reported rampant
fraud as crime rings took advantage of weak systems to create fake claims
and to steal funds from those who legitimately should have received
benefits. Bank of America, which has run the prepaid card program for the
State of California for over a decade, is being scrutinized by The Office
of the Comptroller of the Currency and the Consumer Financial Protection
Bureau for they way they handled payments for false claims and inquiries of
fraudulent transactions. They are also being criticized for not using
prepaid cards with more secure EMV chip technology.

For more, see
https://www.paymentsjournal.com/bofa-and-regulatory-agencies-feud-over-prepaid-cards-for-benefits/

*RipplesNigeria: Currency in circulation in Nigeria hits all time high; 20
February 2022*

The total currency in circulation (the total amount of physical cash
represented in paper or coins) in Nigeria closed the year 2021 at an
all-time high of N3.33 trillion. This represents a 19.06 percent rise from
2.44 trillion in 2019. In its report on currency operations, the Central
Bank of Nigeria (CBN) said, “The growth in CIC reflected the continued
dominance of cash in the economy.” This despite a stated government policy
of supporting moves towards a fully digital – and therefore cashless -
society.

For more, see
https://www.ripplesnigeria.com/currency-in-circulation-hits-all-time-high-as-cbn-pushes-n418bn-into-economy/

*Payments Afrika: Mobile Money Interoperability in Africa – White Paper;
January 2022*

Mobile money has changed the face of Africa, creating new pathways to an
improved standard of living across the continent. With so many platforms in
single markets, however, it’s the path to interoperability that creates
challenges for all participants in the mobile money ecosystem. There are
four basic options to enable mobile money interoperability; inter-company,
central bank/bank coalition, standards based, and merchant based.

For more, see:
https://paymentsafrika.com/mobile-money-interoperability-in-africa-whitepaper/

*Roessler et al: The Economic Impact of Mobile Phone Ownership in Tanzania;
Working Paper 2021-05, Centre for the Study of African Economies,
University of Oxford, 2021 *

Leveraging one of the first large-scale case-control studies on women’s
mobile phone ownership, this research finds that smartphones controlled and
used by women increased households’ annual consumption per capita by 20% in
Tanzania. However, treatment effects were attenuated by handset turnover;
by the end of the study period only 34% in the smartphone condition still
possessed their handsets. This highlights the economic benefits of closing
the mobile gender gap but also the tenuous nature of productive asset
ownership for women in low-income households.

For more, see: https://econpapers.repec.org/paper/csawpaper/2021-05.htm

*James Shepherd-Barron MIH, PhD (hc)*
*Disaster Management Consultant* (*in case you're wondering, this means I
advise Governments, UN Agencies, International NGOs and the private sector
on the modelling and management of international disaster risk*)

I am also an Adjunct Professor at Fordham University and CEO of The* Aid
Workers Union*, the support service for independent aid professionals (
https://www.aidworkersunion.org)

Mobile: +44 7785 70 34 90
Skype: james.s-b
Twitter: @jshepherdbarron
https://www.aidworkersunion.or <https: www.aidessentials.org="">g

The information contained in this e-mail message may be privileged,
confidential, and protected from disclosure. Any unauthorised use,
printing, copying, disclosure, dissemination of or reliance upon this
communication by persons other than the intended recipient may be subject
to legal restriction, sanction or redress. If you think you have received
this e-mail in error, please reply to the sender to that effect and delete
this email promptly.

Please note: This email has been checked for computer viruses, but be
aware that this service is not 100% reliable. Do not open any attachment
unless you have specifically requested it. The sender bears no
responsibility for any such transmission.</https:>