By Mario Schmidt, Christiane Stephan, Kawikya Judith Musa and Eric M. Kioko
Panic! Rush! Empty sacks! Women running! Big cars passing by! Boom! All women stare at the same spot on the road: a car passing by. Within seconds, many of them rush towards it. One who was selling roasted maize, water and a few more goods leaves her place of work opposite the road and runs towards the vehicle as well. Panic and competition are in the air. Within a few minutes, the women come back, discouragement and lack of morale palpable in their bodies and faces. “What happened?”, one of those left seated asks. “The driver didn’t think we were this many, so he closed the car´s door and left!”
This scene gives insight into dynamic moments taking place along the roadsides of Nairobi’s affluent suburbs since the onset of the Covid-19 pandemic. It displays the intensified competition characterizing the job market for informal house helps looking for work and financial or material assistance. Suburbs like Kileleshwa or Kilimani present an unusual picture to those accustomed to see African cities through photographs of slums and shantytowns. Yet, here we have elegant residential areas mushroomed in leafy environments, roads with pedestrian walkways for cycling and jogging, cosmopolitan coffee joints, posh malls, and police patrols.
By Mario Schmidt, Eric Kioko, Evelyn Atieno Owino and Christiane Stephan
Everyday economic life in Nairobi has been transformed following the COVID-19 containment measures installed by the Kenyan government. In the immediate aftermath of Kenya’s first case reported on 13th March 2020, President Uhuru Kenyatta shut down air travel, introduced a nationwide curfew for the night hours, introduced a mask requirement, reduced passenger numbers in public transport, closed schools and institutions of higher learning and restricted social gathering. These measures set in motion transformations that span across various networks and scales of the urban. In order to analyze the effects of Kenya’s political elite’s response to the Covid-19 pandemic on urban households, we have teamed up with five Kenyan colleagues who conducted over two hundred qualitative interviews in different locales of Nairobi and Nakuru. In Nairobi, our assistants, who made sure that measures of COVID-19 containment and personal safety were respected, worked in the informal settlement Kibera, the low-income tenement settlement Pipeline (Embakasi), and Kileleshwa, home to richer Nairobians and expats. Our research assistants interviewed Nairobians from the age of twenty to over eighty years. Among the respondents were migrants and people born in Nairobi, casual, unemployed and laid-off workers, maids, housewives, Uber drivers, white collar workers, shop owners, club bouncers, artists, daycare owners, tailors who found a new job producing face masks, waiters, chefs as well as people employed by NGOs.
By Jörg Wiegratz, Catherine Dolan, Wangui Kimari and Mario Schmidt
Research on economic pressure in Africa has been approached from diverse vantage points. While economists frame ‘pressure’ as a consequence of market failures, or as a by-product of macro-economic measures such as structural adjustment reforms or technological and political change, anthropologists who zoom in on the economic pressures individuals face in their everyday lives, i.e. the lived experiences of those who are ‘under pressure’ have focused more on topics such as uncertainty and precarity. Alternatively, economic psychologists tend to naturalise pressure as an individual response to an adverse financial situation, eclipsing the varied ways pressure is intertwined with and shaped by broader societal transformations, power structures, social relations and obligations, and webs of exchange. There are currently no studies we are aware of that focus on the multi-faceted societal constitution of economic pressure in capitalist Africa, or that compare how pressure is experienced across gender, generation or socioeconomic groups.Read More »
Over the past decade the expansion of digital-financial inclusion through innovations in financial technology (fin-tech) has been identified by the World Bank, the G20, USAID, the Bill & Melinda Gates Foundation, and other major international institutions, as a key way to promote development and alleviate poverty in the Global South (GPFI, 2016; Häring 2017; World Bank, 2014). Perhaps the most influential and widely reported publication pushing forward this narrative is an article examining M-Pesawritten by US-based economists TavneetSuri and William Jack—and published in the prestigious journal Science—entitled ‘The Long-run Poverty and Gender Impacts of Mobile Money’. M-Pesa isa mobile phone, agent-assisted platform for transferring money from one person to another. It was originally developed with funding from DFID and has quickly become a darling of the digital-financial inclusion movement. In this particular article,the authors make the far-reaching claim that ‘access to the Kenyan mobile money system M-PESA increased per capita consumption levels and lifted 194,000 households, or 2% of Kenyan households, out of poverty’ (Suri and Jack, 2016: 1288).
Suri and Jack’s article in Sciencehas sent ripples through the global development community and has served—as perhaps was intended—to solidify support for upping the promotion of digital-financial inclusion initiatives across the Global South. Importantly, the article’sclaims of unprecedented poverty reduction have been uncritically picked up by all of the international development agencies and microcredit advocacy organisations, as well as by many mainstream economists, so-called ‘social entrepreneurs’, tech investors, and media outlets. Much like microcredit in the 1980s, fin-tech and digital-financial inclusion is now very widely seen as a key—if not the key—to reducing global poverty and promoting local development.
In this post we summarise our recent article entitled ‘Is Fin-tech the New Panacea for Poverty Alleviation and Local Development?’ (Bateman, Duvendack, and Loubere, 2019), which challenges Suri and Jack’s findings, and urges the global development community to take a second, more critical look at their study. We argue that the article contains a worrying number of omissions, errors, inconsistencies, and that it also employs flawed methodologies. Unfortunately, their inevitably flawed conclusions have served to legitimise and strengthen a false narrative of the role that fin-tech can play in poverty alleviation and development, with potentially devastating consequences for the global poor.Read More »
Getting access to credit is a critical challenge for small-holder farmers all over Sub-Saharan Africa . A new breed of financial-technology firms (fintech) promises to address this issue, claiming that digital technologies can lower the barriers for borrowers and cut transaction costs for lenders. As part of our ongoing project on digitisation and data in US and Kenyan agriculture, we have been examining these claims, studying how tech companies translate them into business initiatives and exploring the implications for knowledge production, economic growth and value redistribution.
In rural Kenya, fintech innovations are premised on greater efficiency and transparency and inspired by narratives of digital disintermediation. Similarly to what argued for migrant remittances by Vincent Guermond in a previous post of this blog series , digital lenders harness data (extracted through digital infrastructures) and algorithms to make farmers more legible and, therefore, more predictable. In order to expand their pool of data, Kenyan fintechs are increasingly embedding themselves into inter-connected digital infrastructures, or platforms. These platforms provide farmers with end-to-end solutions, and thereby bundle together financial services with the provision of agricultural inputs and information extension services. In so doing, lenders recalibrate and harmonize their risk-assessment procedures, and construct an ideal type of farmer whose financial behaviours and importance in the local value chain can be clearly pinned down.Read More »