Cell Phone Nation: How Mobile Phones Have Revolutionized Business, Politics and Ordinary Life in India (23 page)

A second aspect emerged from the research of Donner and Escobari. The early accounts of Kerala’s fisherfolk suggested that the mobile phone allowed producers—the people who caught the fish—to undermine the control that traders and middlemen exercised over prices. In the past, traders benefited from the fact that fish were perishable and a catch, once landed, could not easily (or fragrantly) be taken to another market. However, when Robert Jensen did his research soon after the mobile came to Kerala, the phone gave fishermen the opportunity to negotiate with buyers on land while they were still on the water and thereby determine where they would land their catch. Within ten years, however, ‘the collusive behaviour of the buyers’ had ‘become a gross material reality’.
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This was also the experience elsewhere. ‘None’ of the studies reviewed by Donner and Escobari suggested that ‘mobiles help MSEs [Micro and Small Enterprises] bypass middlemen’.
²⁹
Nor should this be surprising. Traders began with the advantage of better access to communications and information than producers. (Recall
Chapter 1
and the fact that in 1761 the merchants of Pune knew of the Maratha defeat at Panipat days before the political rulers and the general populace.)
³⁰

These pictures were less exhilarating than some more impressionistic and optimistic writing about telephony had conjured up. But the ‘no new work and no improvement in equity’ picture needs to be modified in one significant way. New jobs
have
resulted in the area where one would expect: in the support, expansion and imaginative development of mobile telephony
itself. The growth of a mass-based industry, as we saw in
Chapters 3
and
4
, needed hundreds of thousands of people to service it, just as the railway and automobile industries created huge demand for workers in the nineteenth and twentieth centuries.
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Two examples illustrate how making a living in India changed with the advent of mobile technology. The first is a story (with an uncertain ending) of how technology enabled economic activity that was previously impossible: simple, mobile-phone-based banking, similar to M-PESA in Kenya, but with distinctive Indian features. The second example analyses the general phenomenon, noted by Donner and Escobari, of the mobile phone improving productivity and generating ‘changes
in degree’
rather than ‘changes
in structure’
.
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The boatmen of Banaras, like the fisherfolk of Kerala, engage in an occupation almost as old as the River Ganga itself; but the mobile phone—and the diesel engine—changed some of the ways in which they plied their trade and conducted their lives.

At the bank …

In 2009, as M-PESA was passing the six-million-client mark in Kenya, the brothers Abhishek and Abhinav Sinha launched EKO in New Delhi. The idea was similar to that of M-PESA but geared to Indian demography and practices. The brothers were from Bihar, both had graduated from the Birla Institute of Technology near Ranchi in Jharkhand state and Abhishek had been a founder of a successful company that created software to improve the process for topping up mobile phone accounts electronically. ‘We were doing an application for recharging talk time for an operator in Oman’, Abhishek Sinha explained. Strolling and talking, he and his brother passed a ‘small
paan
kiosk. Just imagine’, they said to each other, ‘that the guy who wants to buy a cigarette can do it with his cell phone’.
³³
Their thoughts were in tune with other engineers and economists who sought ways to digitise money—to create ‘mobile money’ or put a cash card on one’s phone.
³⁴

M-PESA (M for Mobile and Pesa for ‘money’ in Swahili) differed from EKO significantly. M-PESA was run by a mobile phone operator, Safaricom, which was in turn a subsidiary of Vodafone. EKO was an independent enterprise, owned neither by cell-phone providers, nor by banks. But EKO developed formal arrangements
with the State Bank of India (SBI) and the ICICI Bank as a ‘business correspondent’, which gave its depositors guarantees and services and allowed EKO to describe itself as providing banking services. It also allowed it to place the reassuring logos of the State Bank of India and the ICICI Bank on its posters and advertising materials.

India presented tantalising challenges. Policy-makers agreed that the state, for all its proclaimed efforts to banish poverty (
garibi hatao!
had been a rallying cry from 1970), had too often failed to get resources into the hands of the people for whom they were intended. This resulted from India’s citizens not being enmeshed effectively with the state—through tax-paying, school attendance, electricity and water connections, medical provision or bank accounts. It was one thing to say in effect, ‘We’re the state and we’re here to help you’, but it was another to connect with the people that the state intended to help. The cheap, mass mobile phone appeared to offer a way. But could procedures and technologies that worked for a few thousand people—or even a few hundred thousand—be made to work for hundreds of millions? The problem for the Sinha brothers and others like them was to create a method of banking that was no more difficult than topping up one’s pre-paid mobile phone account.

In developing a banking model for India based on mobile phones, a key requirement was to instil trust. Why would someone hand over their hard-won savings without having a printed receipt or a passbook? An answer appeared to lie in the mobile-phone experience, and in bringing into the EKO system local shopkeepers who were already part of the networks selling Fast Moving Consumer Goods (FMCG). Paperwork and bookkeeping deterred many semi-literate users of cheap mobile phones; well-known local shopkeepers had been essential in overcoming those fears. Familiarity, simplicity and trust were three essentials in inducing poor but busy people into new practices, particularly those that risked meagre savings. ‘The choice of us using a grocer as a community banker’, said Abhishek Sinha ‘is that he is already a trusted guy’.
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To get a mobile phone, people needed to do only minimal paperwork at the sign-up stage, and EKO aimed to make getting the basic facilities of a bank just as simple. But to achieve trust and simplicity, efficiency was vital. Anupam Varghese, EKO’s vice-president for research and design, described this as a
process of ‘learning and unlearning’.
³⁶

What were the virtues of having a bank account? Once people had one, they were in relations with the state, which could monitor them in various ways, yet a bank account also allowed them to keep their earnings safe, to save money and to pay bills or aid relatives. The disadvantages of people who did not have bank accounts were well illustrated in the difficulties in transferring wages to workers under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), which guaranteed 100 days’ work a year at a minimum wage to any Indian citizen who asked for it. Begun in 2005, MGNREGA was the largest scheme of its kind ever attempted, and one of its greatest challenges was to ensure that a worker’s wages ended up in the worker’s hands without intermediaries siphoning it off. The program also aimed to give every worker a bank account to improve the chances of full wages finding their way to rightful recipients.

Surveys found that bank accounts did not eliminate corruption, but they helped. Even illiterate people, who were 45 per cent of the sample in one survey, had ‘an interest in learning how to use the banking system’, and more than 75 per cent of the sampled workers liked receiving their wages via a bank. But distance was a problem: more than 40 per cent had to travel more than five kilometres to a bank, and a number had to travel more than 10 kilometres, effectively losing a day’s pay in order to withdraw wages.
³⁷
Getting a bank account was intimidating. In the sample, 60 per cent of workers went with either an official or a contractor to open an account. Paperwork had to be learned, and corrupt and crafty intermediaries could induce workers to sign piles of withdrawal slips or manipulate their passbooks. There was nothing new about the intimidating quality of banks. ‘When I go into a bank I get rattled’, the Canadian humourist Stephen Leacock wrote of small-town Ontario in the 1890s:

The clerks rattle me; the wickets rattle me; the sight of the money rattles me; everything rattles me. The moment I cross the threshold of a bank and attempt to transact business there, I become an irresponsible idiot.
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Leacock had a PhD in Economics from the University of Chicago. Illiterate people in twenty-first century India were more enterprising than Leacock (who vowed in future he would keep his savings in silver dollars in a sock). ‘For now I am learning’, one MGNREGA wage earner explained about
going to the bank with a helper. ‘Later I will go on my own’.
³⁹

Indians in the first decade of the twenty-first century were under-banked and widely dispersed. Seventy per cent of the population lived in 600,000 villages, but there were fewer than 75,000 bank branches, heavily concentrated in cities and large towns. By 2012, however, there were more than 900 million mobile phone subscribers.
⁴⁰
If mobile phones could become mobile passbooks, greater honesty, efficiency and equality might be achieved. People were willing to learn, and mobile phones were becoming cheap enough for even the very poor.

The challenge for an organisation like EKO, according to its founders, was to develop a system that would make sense to poor people. But who were ‘the poor’, what did they need and what could ‘mobile banking’—whatever that might be—do for them? The Sinha brothers and their colleagues went back to Bihar, one of India’s least prosperous states, to learn about people’s everyday practices and needs. For many Biharis saving money was practically impossible because of the crowded conditions of the joint-families in which they lived. Varghese said:

People did not have a safe place to store and save money. [This was] a concern voiced by women whose primary chore was to manage the household economy, yet they were often harassed to give what meagre savings they saved to their husbands who were often unemployed and took to the drink.
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There were also technical aspects that required EKO to unlearn some of its assumptions. The EKO team observed how mobile phones were obtained, maintained and recharged. Most people used cheap basic phones; multimedia and smart phones were costly and less common. The neighbourhood shopkeeper—who sold a host of products as well as the recharge coupons for mobile phones—proved to be pivotal for mobile-phone transactions. As trusted, worldly-wise players in the cell-phone world, they helped marginally literate people manage their mobile phones. (See
Illus. 22
). Shopkeepers knew which buttons to press at what point should it be a ‘#’ or a ‘*’?—and had an interest in helping: they got a commission on every card or mobile-phone service sold.

Poor people, though illiterate or semi-literate, had already shown the skills, including everyday numeracy, to operate mobile phones, and using a mobile phone often enhanced
those skills. People became familiar with the phone’s keypad, learned to follow numerical patterns and became adept at recharging phone credit and checking their balance of remaining talk-time. Such observations led EKO to develop a simple Mobile Money Transfer (MMT) method, as Varghese explained:

We had to follow a few basic principles to accommodate the lower denominator:

1. that our operation could work on low-cost devices
   

2. [that it was able to] make use of the dialling pad interface, as was commonly used for checking one’s balance [and]
   

3. [that it was able to] make use of the existing infrastructure, which people were now using for recharging their phones.
   

Another important practice in India is missed calls. If the Philippines is the SMS capital of the world, then India is the missed-calls capital, and we soon realized that tapping into a missed-calls practice would be far more sensible than trying to do the transactions through a messaging system. Even SMS which seems to us an easy operation meant an additional layer of complexity, and demanded the actual navigation of the keys. Again, we had to ‘unlearn’ and ensure our method could work across various mobile models on the simplest key pad.

‘Unlearning’ meant avoiding new practices, even though it seemed essential to have some sort of ‘smart’ technology for mobile-phone banking. Indeed, according to Varghese, a few companies did attempt to use extra devices for their e-banking schemes, such as biometrics, or smart cards and thumb-impression machines, or even CCTVs, but these did not work well. EKO’s view, as its founders emphasised, was to use what people already felt confident with—both the physical infrastructure and social practices—from small shops to routines of mobile phone recharging. If carrying one’s mobile phone had become as easy as slipping on one’s sandals, using it to gain the services of a bank needed to be as familiar and unchallenging as acquiring new footwear. Operating an EKO-style account was like writing a cheque or withdrawing money from an ATM. The shopkeeper functioned as the ATM; the mobile phone was the debit card; and deposit of funds followed the same logic as purchasing a pre-paid coupon for a mobile phone.

EKO was by no means the only initiative attempting to use mobile phones to provide simple banking to relatively poor people. But the EKO model captured the
potential of the cheap mobile phone and illustrated why having a bank account was important for people who had to deal with a modern state and were entitled to benefits from it. By the end of 2011, EKO had 170,000 account holders in New Delhi, Bihar and Jharkhand and more than 1,300 Customer Sales Points (CSP).
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