Nicholas Loubere scite author profile

Is fin-tech the new panacea for poverty alleviation and local development? Contesting Suri and Jack’s M-Pesa findings published in Science

Bateman

¹

,

Duvendack

²

,

Loubere

³

2019

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Financial technology, or simply 'fin-tech', is increasingly seen as one of the key tools to facilitate poverty reduction and local economic development. One article in particular by Tavneet Suri and William Jack published in the leading publication Science has played a hugely influential role in promoting the fin-tech model in the global South using the example of Kenya's iconic M-Pesa money transfer platform. The authors' central claim is that M-Pesa has been instrumental in facilitating a major episode of poverty reduction. Our analysis shows that their analysis and claims are extremely problematic. <

>In recent years financial technology, or simply 'fin-tech', 1 has come to be seen as one of the key tools to facilitate poverty reduction and local economic development (McKinsey Global Institute 2016). While there is a growing body of literature critiquing the push for digitalfinancial inclusion (see Gabor and Brooks 2017;Loubere 2017;Mader 2016), pillars of the global development establishment and global financial industry have wholeheartedly embraced the new fin-tech narrative. Leading the way are the World Bank, the G20, USAID, the Bill & Melinda Gates Foundation, Citibank, Mastercard, and many others, all of whom are aggressively pushing for the inclusion of fin-tech in virtually all development interventions (see Häring 2017). Some commentators go so far as to say that fin-tech will have a dramatic positive impact on society, perhaps as much as the industrial revolution, suggesting its emergence as heralding a new golden age (Porteous 2017). Importantly, it is in the global South, and particularly in Kenya (see Ndung'u 2018), where the impact of fin-tech is being most rigorously tested and -it is claimed -generating the key lessons other African countries need to quickly learn in order to take advantage of its benefits.By far the most internationally celebrated example of fin-tech's supposed developmental potential not just in Africa, but in the global South overall, is M-Pesa -Kenya's agent-assisted, mobile phone-based, person-to-person payment and money transfer system. M-Pesa began as an experiment in helping smooth the flow of finance within and across Kenya's poor communities. Its origin can be traced to a project funded in the year 2000 by the United Kingdom's Department for International Development (DFID) with the aim to encourage the private sector to improve access to financial services. With an award of one million GBP to the UK multinational Vodafone, the contract was expected to deliver a product that could use mobile phone technology as a platform upon which to deliver financial services in East Africa. M-Pesa was formally launched in March 2007. It was originally expected to specialise in providing microcredit, but it was soon clear that most clients were more interested in the transfer of money, which then became the focus of M-Pesa's activity. M-Pesa operates through a network of agents that allow clients to deposit cash into their accounts and withdraw or tran...

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Indebted to development: microcredit as (de)marginalisation in rural China

Loubere¹

2016

The Journal of Peasant Studies

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China’s Internet Finance Boom and Tyrannies of Inclusion

Loubere¹

2017

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Digitally Down to the Countryside: Fintech and Rural Development in China

Kong

¹

,

Loubere

²

2021

The Journal of Development Studies

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Digital finance has changed the landscape of financial service provision worldwide. China in particular, with a booming fintech sector and large numbers of users, is at the forefront of the expansion of digital financial services. As such, the country has become an important case for better understanding how fintech operates and what its expansion entails for socioeconomic development. This paper focuses on the provision of new models of digital finance in rural China by two Internet giants -JD and Alibaba. Against the backdrop of decades of generally unsuccessful attempts to expand financial coverage in rural areas by conventional bricks-and-mortar financial institutions, these two rural fintech models have the potential to expand digital financial service provision in new ways. This paper critically examines these fintech models, contextualises them within the broader trajectory of pushes to expand digital financial inclusion worldwide, considers the parallels with agricultural supplier contracting systems elsewhere, and explores the potential benefits and risks that they pose for rural development and rural livelihoods in China and elsewhere.

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South‐South Irregular Migration: The Impacts of China's Informal Gold Rush in Ghana

Botchwey

¹

,

Crawford

²

,

Loubere

³

et al. 2018

International Migration

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This article examines irregular South‐South migration from China to Ghana, and the role it played in transforming livelihoods and broader developmental landscapes. It looks at the entry of approximately 50,000 Chinese migrants into the informal small‐scale gold mining sector from 2008‐2013. These migrants mainly hailed from Shanglin County in Guangxi Province. In Ghana, they formed mutually beneficial relationships with local miners, both legal and illegal, introducing machinery that substantially increased gold production. However, the legal status of Chinese miners was particularly problematic as, by law, small‐scale mining is restricted to Ghanaian citizens. In mid‐2013, President Mahama established a military task force against illegal mining, resulting in the deportation of many Chinese miners. The article examines the experiences of both Chinese migrants and Ghanaian miners. Findings are that irregular migration into an informal sector had long‐lasting impacts and played a significant role in the transformation of economic, political, and physical landscapes in Ghana.

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