Month: May 2023

Approximately three billion people around the world rely on traditional fuels (wood, kerosene, animal and crop waste, and coal) for cooking. The results are staggering: millions of premature deaths each year, an unsustainable drawdown of forest resources, and climate warming emissions (primarily CO2 and black carbon).^[1] In Ghana, air pollution from cooking ranks as the second-highest risk factor for death and disability.^[2],[3] The burden of traditional fuels falls heavily on women and children, whose responsibilities often include gathering firewood in rural areas and cooking in enclosed spaces where they are exposed to harmful emissions.^[4]

The primary alternative to traditional biomass fuels in Ghana is Liquid Petroleum Gas (LPG). However, there are significant barriers to the adoption and sustained use of LPG, especially for those in rural and peri-urban areas. Such barriers include the significant entry cost of purchasing a stove and cylinder, distance to LPG suppliers, and high supply costs, which results in high prices in rural and peri-urban areas.^[5],[6],[7] In the near future, the Government of Ghana will implement a market system where users have to purchase LPG by exchanging (instead of refilling) full cylinders. This improves safety but adds an additional cost for low-income households, as they will have to save up to purchase a full cylinder. Despite ambitious policy goals targeting LPG use and numerous programs to increase adoption, dependence on traditional fuels (i.e., charcoal and firewood) remains high, particularly in rural and peri-urban areas. Digital financial services (DFS) may help transition current traditional fuel users to cleaner alternatives.

Ghana has recently become the fastest-growing mobile money market in Africa, with 40.9 million registered mobile money accounts and 17.5 million active accounts in 2021.^[8] Typically, mobile money is used for personal banking or person-to-person transactions. Paying for services such as electric and water bills or cooking fuel has not traditionally been a function of mobile money. Cooking fuel expenses, however, lend themselves very well to mobile money transactions, as they are recurring, moderate outlays of money.

In our research, we assessed the potential for mobile money to bridge the gap between LPG supply and demand, increase access to and use of cleaner cooking technology, and ultimately improve women’s health by decreasing their overall time spent procuring fuel and cooking. We aimed to understand the general viability of utilizing mobile money to purchase LPG and which mobile app features would be most interesting and useful to the consumer. Our ultimate goal is to enable a smooth transition to clean energy for more households. To investigate this, we conducted a series of six focus group discussions with LPG users and charcoal users, as well as a targeted survey of 100 primary cooks (92% of whom were female) in peri-urban Accra.

We elicited stated demand for several features, including 1) savings incentives (e.g., cash rewards for consistent contributions to the mobile wallet), 2) a credit mechanism whereby consumers can borrow small sums if they run out of fuel but lack the money needed to purchase LPG, 3) a loyalty rewards program, 4) home deliveries of LPG, 5) group discounts for coordinated delivery, 6) discounts for scheduled delivery service, and 7) the ability to contribute to LPG wallets of family members and friends. The most popular features—delivery services, loyalty programs, savings incentives, and access to credit—reflect and address some of the key constraints to using LPG: cost and accessibility.

Delivery services provide a convenience factor and could potentially reduce the overall cost and time associated with procuring LPG. A savings incentive program whereby customers are reminded to save a small amount each day/week and receive rewards for doing so, as well as access to small amounts of credit, allows users to reduce the upfront cost of LPG. Savings programs, or “susu” in the local language, are well established in the surveyed communities. Many focus group participants reflected that having a dedicated mobile wallet for LPG makes inherent sense, as one respondent said, “It would be extremely helpful in times when I do not have enough money when my gas gets finished. By saving small amounts of money, the accumulated amount by the time my gas runs out will surely be enough to cover the cost of the refill.”

Through our focus group discussions, we also learned that having a record of gas purchases could help women with intrahousehold communication and planning and saving for the future. We heard from one participant that purchasing LPG with a mobile money wallet “will prevent conflicts between spouses since it serves as proof of the current prices. It prevents doubt about cheating and saves time and transport fares because everything about whatever refill we are going to make is there to see on the platform.”

Interestingly there is a sharp decline in demand for features that involve coordination and planning by the user. As seen in the figure above, receiving a discount for coordinating a delivery with your neighbors or scheduling a delivery for a set date proved less desirable for LPG and charcoal users. In the focus groups, the charcoal users had a slightly more positive take on the idea of coordination, stating that some already try to do this for other purchases. However, the majority expressed that coordinating refills with neighbors can be challenging, as one participant stated, “I do not think it will be possible to refill the cylinder together with neighbors because the time that one person’s gas is likely to finish will vary from the time the other person’s gas will be finishing.” Mobile app features may help lower these coordination difficulties, allowing more distant neighbors on the same delivery route to economize on delivery fees.

Overall our research has shown that linking LPG purchases to digital financial services has the potential to reduce overall transaction costs, thereby making the transition to cooking with cleaner cooking fuels easier. The key to this transition is enabling and encouraging consumers to save toward larger purchases and ensuring access to LPG by developing a robust delivery program. Cooking with LPG reduces exposure to harmful cooking fumes and frees up time to pursue other endeavours, ultimately offering women more opportunities.

This work is part of a larger project funded by the Columbia World Projects. Findings will inform a full-scale randomized controlled trial during which we plan on testing core features of a mobile app for LPG purchases as a contributing factor to increasing the uptake of LPG in peri-urban areas.

References

^[1] World Health Organization. (2018). Opportunities for transition to clean household energy: application of the Household Energy Assessment Rapid Tool (HEART): Ghana.

^[2] GBD 2019 Risk Factors Collaborators. (2020). Global burden of 87 risk factors in 204 countries and territories, 1990-2019: a systematic analysis for the Global Burden of Disease Study 2019. Global Health Metrics, 396(10258), 1223-1249.

^[3] The Institute for Health Metrics and Evaluation (IHME). Ghana.

^[4] World Health Organization. (2016). Burning opportunity: clean household energy for health, sustainable development, and wellbeing of women and children.

^[5] Agbokey, F., et al. (2019). Determining the Enablers and Barriers for the Adoption of Clean Cookstoves in the Middle Belt of Ghana—A Qualitative Study. International Journal of Environmental Research and Public Health, 16(7), 1207.

^[6] Abdulai, M., et al. (2018). Experiences with the Mass Distribution of LPG Stoves in Rural Communities of Ghana. EcoHealth, 15(4), 757-767.

^[7] Dalaba, M., et al. (2018). Liquified Petroleum Gas (LPG) Supply and Demand for Cooking in Northern Ghana. EcoHealth 15, 716-728.

^[8] Yaw, N. (n.d.). Mobile Money in Ghana. AZA Finance.

Authors

Heather Lahr, UC Santa Barbara, Bren School of Environmental Science & Management

Kelsey Jack, UC Santa Barbara, Bren School of Environmental Science & Management

Darby Jack, Columbia University, Mailman School of Public Health

Flavio Malagutti, UC Santa Barbara, Bren School of Environmental Science & Management

Linnea Graham, Columbia University, Mailman School of Public Health

Edward Tsinigo, Innovations for Poverty Action, Ghana

Eric Tawiah, Innovations for Poverty Action, Ghana

While the impact of cash transfers on women’s economic empowerment (WEE) is relatively well-established, transfers distributed via mobile money could theoretically generate a greater impact on WEE compared to cash.[1] Several mechanisms exist through which mobile money could benefit economic outcomes for women⁠—especially women in Sub-Saharan Africa. These mechanisms include improving their outside options, relaxing mobility constraints, promoting their agency, and providing privacy and security.

However, noticeable gaps exist in studies testing the impact of mobile money services on WEE, as well as the mechanisms through which mobile money services impact WEE.[2]^,[3] In this study, we compare the differential impact of targeting mobile money relative to cash for women and explore the role of privacy as a causal mechanism through which DFS impacts WEE.

Gender and mobile money in Sub-Saharan Africa

The use of mobile money as a form of digital finance has increased widely in Sub-Saharan Africa (SSA) over the past decade.[4] In 2021, 33% of adults in SSA had a mobile money account (Figure 1), compared to a global average of 10%. The gender gap in accessing mobile money services was also reduced by 3 percentage points globally. In Sub-Saharan Africa, the gender gap ranged from insignificant in Uganda to 27 percentage points in Côte d’Ivoire.[5]

The rapid expansion of mobile money services in SSA has been shown to offer women more benefits than cash. For example, a study in Niger demonstrated that access to and use of mobile money contributed to an increase in women’s bargaining power relative to cash.[6] Other research studies have demonstrated that compared to cash, mobile access and the use of mobile money can improve household outcomes, benefit female entrepreneurs, increase resilience to shocks, and contribute to poverty alleviation.[7]^{,[8],[9],[10]}

Money transfers and privacy

While there is no clear evidence on who within a household should be given monetary transfers to achieve maximum impacts for women’s empowerment, women are frequently the target recipients of cash transfer programs. Currently, most cash transfer programs in SSA are rolled out at the community level with the help of village elders who mobilize beneficiaries and register them for the program. The enrollment and disbursement of cash happens publicly and is widely discussed within the community. Thus, the nature of program delivery makes information about cash transfers openly available to other households and community members.

Publicly observable income can limit positive impacts on WEE outcomes relative to when women can keep this information private. When information about a woman’s income is widely accessible, she can be pressured to share money with her family or others. In cases where money is transferred directly but publicly to women, the potential positive effects of the monetary transfer on WEE are limited. Research has shown that women, in an experimental setting, make investment choices that lead to lower income if it allows them to keep the value of their investments private.[11]

Further, social pressures for women to share their observable income with others, such as extended family members and neighbors, have been shown to affect women’s enterprise investments. In circumstances where women were not subject to these pressures–either because they could hide their money, they were offered a private account, or they owned the only household business–women were able to use grants and loans to expand their businesses.[12]^,[13] Moreover, women could increase the size and profitability of their businesses when grants were given in kind rather than in cash.[14] Despite these findings, the role of privacy of information in promoting WEE has not yet been causally tested.

WEE, mobile money transfers, and privacy

To formally evaluate the role of privacy as a mechanism in both cash and digital transfers and to understand implications for women’s empowerment in Uganda, we are conducting a clustered randomized controlled trial (cRCT). Our intervention introduces privacy of information, especially within the household, for women receiving money transfers.

We evaluate privacy as an outcome to test the extent to which women keep information about their income private or share it with others. Further, we employ a diverse set of indicators to measure the differential effect of privacy of information on WEE outcomes, including household decision-making, perceived control over resources, preferences on individual decision-making, and enactment of their economic life goals.

The study includes four treatment groups and a control group. Women in two treatment groups received cash transfers, while women in the other two treatment groups received mobile money transfers. For women in one of the cash transfer groups and one of the mobile money groups, information about the transfer was made known to the targeted woman and her spouse, as is the current practice under many cash transfer programs. For women in the other two treatment groups, the target woman was given the transfer in private. Women in the mobile money treatment group received the transfer directly into their personal mobile money accounts.

At baseline, we surveyed 2,000 women in rural Uganda. We found that women value privacy of information about money transfers. Women feared that if their husbands knew about their income, they would take their money away or prevent them from using it as they would like.

In addition, we confirmed that women tend to hide their money. At baseline 55% of women reported privately storing a portion of their money, which enables them to have greater control over its use, invest in their children, and start their own businesses. When asked about their preferred method of storing money, half of the women preferred to store money in their mobile money accounts. Some women indicated that storing money in digital accounts offered privacy benefits compared to cash and allowed them to transact more easily. Other women offered the following explanations for why they prefer mobile money: “No one can access my account unless he or she knows the pin number,” and “My savings are personal and mobile money enables me to save without anyone knowing.”

The demand for privacy of information was also present for women who stored their personal money in cash. One woman explained, “In instances [where] the partner knows the pin, cash within the household can be better because it involves one person to keep the money privately.”

Findings from this study will enable discussions on the extent to which the mode of delivery and information about money transfers enable women’s empowerment and speak to the mechanisms through which mobile money transfers affect WEE.

References

[1] Garz, S., Heath, R., Kipchumba E., & Sulaiman, M. (2020). Evidence of digital financial services impacting women’s economic empowerment: What explains the impacts and what is left to learn?

[2] Ibid.

[3] Gammage, S., Kes, A., Winograd, L., Sultana, N., Hiller, S., & Bourgault, S. (2017). Gender and digital financial inclusion: What do we know and what do we need to know? International Center for Research on Women (ICRW).

[4] Demirgüç-Kunt, A., Klapper, L., Singer, D. & Ansar, S. (2022). The global findex database 2021: Financial inclusion, digital payments, and resilience in the Age of COVID-19. Washington, DC: World Bank.

[5] Ibid.

[6] Aker, J. C., Boumnijel, R., McClelland, A., & Tierney, N. (2016). Payment mechanisms and antipoverty programs: Evidence from a mobile money cash transfer experiment in Niger. Economic Development and Cultural Change, 65(1), 1–37.

[7] Suri, T., & Jack, W. (2016). The long-run poverty and gender impacts of mobile money. Science, 354(6317), 1288-1292.

[8] Riley, E. (2020). Resisting social pressure in the household using mobile money: Experimental evidence on microenterprise investment in Uganda.

[9] Jack, W., & Suri, T. (2014). Risk sharing and transactions costs: Evidence from Kenya‘s mobile money revolution. American Economic Review, 104(1), 183-223.

[10] Suri, T., & Jack, W. (2016).

[11] Jakiela, P., & Ozier, O. (2016). Does Africa need a rotten kin theorem? Experimental evidence from village economies. The Review of Economic Studies, 83(1), 231–268.

[12] Riley, E (2020).

The long-run poverty and gender impacts of mobile money. Science, 354(6317), 1288-1292.

[13] Bernhardt, A., Field, E., Pande, R., & Rigol, N. (2019). Household matters: Revisiting the returns to capital among female microentrepreneurs. American Economic Review: Insights, 1(2), 141-60.

[14] Fafchamps, M., McKenzie, D., Quinn, S., & Woodruff, C. (2014). Microenterprise growth and the flypaper effect: Evidence from a randomized experiment in Ghana. Journal of Development Economics, 106, 211–226.

Authors: Giulia Greco, London School of Hygiene and Tropical Medicine, Selim Gulesci, Trinity College Dublin, Munshi Sulaiman, BRAC Institute of Governance and Development and Pallavi Prabhakar, BRAC Institute of Governance and Development

When household members are paid at different times and with differing frequencies, households are forced to manage income and expenditures, potentially resulting in cash flow misalignments. However, household cash outflows, such as utility bills and grocery purchases, are typically consistent. To manage liquidity, households must account for various income streams, expected payments, and unexpected payments due to income or expenditure shocks, such as health emergencies and funerals. The latter is a significant issue, especially for the resource-constrained.

Researchers at Good Business Lab and the Busara Center of Behavioral Economics performed an extensive qualitative survey–including a resource mapping exercise–to understand how female garment factory workers and their households manage monthly cash inflows and outflows. The qualitative research sample consisted of 25 female garment factory floor workers in the south Indian city of Bengaluru. The average age of women in the sample was 30 years old, and more than half of the sample (n = 17) were married. Twenty-one women reported having moved to Bengaluru for work. All eight unmarried women were migrants.

Resource mapping: A participatory approach

Resource mapping is a participatory exercise with survey respondents that captures the cash flows of a household over a recallable period. This method has been previously used to understand the financial lives of women in low or middle-income countries (LMICs).¹ In this study, interviewer facilitators presented women with index cards (Figure 1) that contained different categories of cash inflows and outflows that they may have had during the month prior. The categories were designed based on official consumption surveys by the Government of India and further contextualized based on the lives of women who work at garment factories. For example, index cards for hostel costs and remittances were included.

Once the respondent recalled a cash inflow/outflow incurred in the previous month, she was asked to categorize it using the most appropriate index card. A facilitator helped identify cash inflows and outflows. For instance, the facilitator placed the ‘My salary from factory’ card on the left side of the setup (Figure 1) and explained that this signified a cash inflow. Then the facilitator placed the ‘Food expenses’ card on the right side and explained this as a cash outflow. Next, the participant indicated how much money was spent on or received from that particular category, as well as the timing and frequency of the financial transaction.

Spending and saving patterns

On average, a woman in the sample generated 50% of her household income. Forty percent of women in the sample were the primary earners in their households. As expected, the magnitude of household expenses was highest at the beginning of the month due to payments toward rent, utility bills, loan repayments, remittances, etc. 

Rent, travel, and utility bills represented the primary planned expenses and constituted the largest proportion of household cash outflows, at 22% of expenditures, on average. Expenditures on food (17%) were the next largest portion of household cash outflows. Around half of the workers interviewed had remitted money to their relatives. Those remitting were primarily single women, whose remittances to their parents accounted for an average of 25% of their total cash outflow for the month.

The researchers also found that certain expenses were lumpy in nature and could be either planned or unplanned.² For instance, some workers reported that 50-60% of their total household expenses were dedicated to their children’s education in the month prior to the survey. Other workers’ households faced health shocks or participated in family occasions that claimed as much as 35% of their total cash outflow for the month. Households that were able to save at the beginning of the month relied upon these savings heavily during times of resource crunch. However, most of the respondents shared that they typically utilized their incomes as needed and saved any remainder, indicating that savings are mostly unplanned. Thus, many households did not save systematically, and this has implications for meeting their emergency needs and building assets and wealth over time. 

Sources of credit

Approximately 40% of all women workers in the sample reported repaying principal, interest, or both for loans taken in the past. Thirteen percent of the respondents borrowed in the month prior to the survey. Some households were so deeply entrenched in debt that 50% of their monthly expenses were dedicated to equated monthly installments or interest payments. 

Single women reported relying upon friends or colleagues for financial support during emergencies, while married women relied upon their family or neighbours, moneylenders, and pawnbrokers. Some women in the sample reported that they had no role whatsoever in financial decision-making, and their spouses or parents were responsible for arranging money in times of need. Given these demand-side constraints, reducing the supply-side constraints only through access to financial products may have a limited impact on certain women.

The resource mapping exercise prompted women to intentionally consider nuanced aspects of the timing and magnitude of incomes and expenses, as well as consumption smoothing patterns. Thus, this approach can help researchers fine-tune quantitative survey instruments to effectively capture aspects of women’s financial well-being, resilience, and budgeting patterns. We intend to apply the learnings from this experiment to design financial instruments that can help workers meet their financial goals, like easing their liquidity constraints through a zero-cost flexi-salary option and enhancing micro-savings. 

References

1. https://www.designkit.org/stories/251.html
2. Lumpy expenses are those that fluctuate, generally from month to month.

Apoorv Somanchi is a Research Associate at the Good Business Lab, Simranjeet Dhir is a Research Manager at the Good Business Lab and Sowmya Dhanaraj is a Senior Research Fellow at the Good Business Lab