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Barriers to Mobile Money Transfer Uptake in Ghana


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EPS Seminar #6

Dr. Vivian Afi Abui Dzokoto
Virginia Commonwealth University

Dr. Edwin “Cliff” Mensah
University of North Carolina at Pembroke

March 30, 2012 - 9:00am - 10:30am
Ghanaian men hold up cell phones as part of the SEND project, CREDIT: IICD

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Do high mobile phone coverage, high mobile phone penetration, and resounding success of mobile financial services (MFS) in a different market in the same geographic region predict its successful adoption? Not necessarily. Research indicates that 73% of Ghanaians live in an area covered by mobile phone services, and mobile phone penetration in Ghana is 65%. Based on these statistics, and given the success of MFS in Kenya, a high degree of market penetration was anticipated for Ghana. However, despite the presence of MFS in Ghana since 2009, adoption has been slow. Given the increasingly recognized potential of MFS in global financial inclusion efforts, it makes sense to investigate barriers to adoption within relevant cultural contexts. In this seminar, Dr. Vivian Afi Abui Dzokoto and Dr. Edwin "Cliff" Mensah will discuss their IMTFI-funded research on the barriers to uptake of MFS within a Ghanaian field-based context.

Presenter Bio:

Dr. Vivian Afi Abui Dzokoto
Virginia Commonwealth University
Dr. Vivian Afi Abui Dzokoto

Dr. Vivian Afi Abui Dzokoto is an Assistant Professor at Virginia Commonwealth University’s Department of African American Studies in Richmond, Virginia. For the past 2 years, she has also been a researcher funded by the Institute of Money, Technology, and Financial Inclusion, which is housed at the University of California, Irvine. Dzokoto’s major research interests lie in the application of quantitative and qualitative techniques to investigate the cultural grounding of money behaviors in developing economies and the cultural grounding of emotion and psychopathology in non-Western contexts. Her money-related research has explored various individual-level aspects involved in adapting to a currency redenomination and mobile money adoption. Prior to joining Virginia Commonwealth University, Dzokoto was an Assistant Professor in Psychology at Fayetteville State University in North Carolina for 4 years. Originally from Ghana, Dzokoto obtained a BSc in Psychology from the University of Ghana and a PhD in Clinical and Community Psychology from the University of Illinois at Urbana Champaign. She completed an APA accredited internship at the University of Michigan Counseling and Psychological Services and obtained licensure as a psychologist and health service provider in the state of North Carolina.

Dr. Edwin “Cliff” Mensah
University of North Carolina at Pembroke
Dr. Edwin

Dr. Edwin “Cliff” Mensah serves as an Associate Professor and Interim Chair of the Department of Economics, Finance and Decision Sciences at the School of Business of the University of North Carolina at Pembroke. Mensah’s research interests include applied microeconomics, consumer economics, agricultural economics and technology adoption. He is currently studying the economics of the use of mobile platforms for monetary transactions (e-money) as well as the economic impact of currency modification and money management among Ghana’s ultra poor, post re-denomination. He is also a visiting Professor of Economics at Valley View University and Data Link University, Ghana-West Africa and the author of the book: “Economics of Technology Adoption: A Simple Approach.” Mensah received his PhD in Economics from North Carolina State University.

Comments (1)
Mar 30, 2012   13:30

1. Agents and Incentives

Question from Waringa Kibe, CHF International, Rwanda : What then do they largely use the phone for; is it voice - calling or sms? I don't know if the researchers have data on this
Waringa Kibe: Maybe there is a need to examine the Agent as a barrier to  uptake, since it is a business model how much effort do they put in promoting this product? Or does it not make money for them. What are the incentives for the agents?

Joel Patenaude: regarding Incentives: airtime is fundamentally different from money.   One can offer incentives (discounts, bonuses) for airtime since it is a service with a set price and this price can be played with.  Money is money -- can't offer money at a discount.   It is not so straightforward to offer incentives.  Apples-oranges

Clifford Mensah: Joel you are right. I am sure if they gave free airtime for money transfer or a mobile money payment it could entice people to use the product

2. Analyzing risks of mobile money

Joel Patenaude (NJ, USA):  A friend in Kenya told me that MPESA has eliminated thuggery.  I wonder whether a sub-group -- people who have been robbed -- would see risks differently. 

3. Market Segmentation

Nicki Goh (DFID in London): Which segment of the population has been first to adopt other types of technology and have the same population been targeted here?

Robert Asambobillah: Has the high rate of illeteracy contributed to the low uptake of the MM?
Robert Asambobillah: A little personal survey in the Upper West region of Ghana show that people are (a) afraid of loosing the money through MM (b) Inable to access funds when needed (c) low level of knowledge of the use of phone. Are these factors also realised during your suevey? What are the suggested ways to overcome this factors

Nick Ramsing (MEDA, USA): I really appreciated Dr. Mensah’s comments concerning providers understanding their market segment and how consumers might utilize their product.  I am hearing that MM/MP providers may not have taken the time to learn consumer scenarios –how people would actually utilize mobile payments.  When people talk on a phone, they enter into a dynamic interaction.  When they utilize an application (eg mobile payment), they enter into a constrained transaction that needs to fulfill a transaction and be flexible enough to allow for exemptions.  To what extent do providers actually understand their market and target channels?
Clifford Mensah: Nick your arguement is right. It has been the habitual for business to enter the Ghanaian market with FIRST studying it. In some cases no feasibility study is conducted
Joel Patenaude: Telcos and banks marketing departments are mostly focused on above the line  marketing (billboards, radio) and have seen enormous rapid growth in basic telco services.  Mobile money is very different and as Cliff noted different approaches are needed.  Is it reasonable to expect large public companies with one (successful) approach to marketing to take the long view and adapt their marketing?

Robert Asambobillah: Did the survey find out whether people were concern about the charges in the use of MM

Clifford Mensah: Yes, we did. However, the fees are quite low. Transfering up to 50GH Cedis would cost about 1.5Gh cedis

Waringa Kibe: Cliff mentioned an interesting thing that the  MM agents are not really available in the highly potential areas like a market? Why would this be?
Clifford Mensah: Poor marketing strategy, Waringa. The companies in my opinion are not being consumer focused.

I find that Safaricom, spends a lot of time studying the market and release functions on MPESA that are so relevant to users. would we know whether the companies in Ghana  invest in this

3. Mobile money for MFIs

Tom Shaw (CRS, USA): Has anyone spoken to the different MFIs to see if this would be a good linkage to the payment of their loans and disbursments? There are 5 national networks grouped together in Ghana