Proposed SNA of diffusion of m-banking technology in the Philippines

Prepared by Lauren Hall, but planning on doing the SNA of German students in the 2nd module as I won't be able to obtain data by the end of the semester

Mobile banking for the poor

SNA of diffusion of m-banking technology in the Philippines

Background and Introduction

The number of phone subscriptions is rapidly increasing in developing countries. There have been many initiatives around the world to harness the power of mobile phones to bring financial services to those without access to traditional banks. Innovations in the Philippines, Kenya, India, South Africa has resulted in successful business models of mobile banking (m-banking) services for the poor, which can incite economic development.

I have been interested in financial inclusion of the poor since I heard about the M-Pesa platform in Kenya. When trying to develop an SNA project, I spoke with Fletcher PhD candidate who gave me the idea of analyzing the diffusion of m-banking in a specific country. While I don’t think I will be able to obtain the data before the end of the semester, I hope to eventually analyze the diffusion of m-banking products in the Philippines.

There are two competing m-banking services in the Philippines- Globe Telecom Inc.’s G-Cash system and Smart Communication Inc.’s Smart Money.  Smart began in 2000 and Globe entered the m-banking market in 2004 (The Enabling Environment for Mobile Banking in Africa, DFID, 25).  Together, Globe and Smart have over 85 million subscribers as opposed to rural banks who serve only amount 6 million clients. 10 million Filipinos have registered the two mobile money platforms (http://www.philstar.com/Article.aspx?articleId=852388&publicationSubCategoryId=74­).

Methodology

I plan to examine if diffusion of m-banking technology in rural settings is due uses, profession, brand loyalty, or recommendation from another person. In order to compile data, I would have to conduct a survey of Filipinos in rural settings.

•  Require data from a sample of m-banking users of several rural settings (~100 people from 2-3 rural settings)
• I might first obtain information about the social networks of the people being surveyed
• List the people in the community and ask how well they know each
• Or perhaps have them list 3-4 people whom they trust
• Survey questions:
• Age/Gender/Religion/Location
• How did you hear about it?
• Friend
• Family
• Customer
• Vendor
• Advertisement
• When did you begin using the product?
• Profession
• Uses
• Remittances
• Money transfer (domestic)
• Withdrawls
• Deposits
• Bill-pay
• Salary receipt
• Why don’t you use it?
• Trust
• Religious reasons
• Too expensive
• Not enough money
• Someone else in my family has an account
• Which company do you use
• Globe Telecommunications
• Smart Communications
• Would also like to know:
• Education/literacy levels
• Frequency of use
• Own the phone? Or own SIM card and share the phone?
•  Network measures
• Bottlenecks- is illiteracy a bottleneck? Is lack of trust a bottleneck? 
• Geographic patterns
• Demographic patterns
• Is adoption larger among young people?
• Centrality
• Is there a certain person in the community that tells everyone about the service?
• Who are the early adopters?
• Was information spread by perceived trustworthy or untrustworthy people?
• Did the non-users hear about the products from someone they don’t trust?

Hypothesis

I hypothesize that the diffusion of m-banking technology is due to a recommendation from someone that the adopter trusts. My goal is that SNA will uncover efficients way to diffuse mobile banking products/technology and perhaps be able to apply in in other developing countries where few people have access to traditional banks.

Potential problems

The data set would have to be quite large to get a relatively accurate picture of technological diffusion of m-banking in the Philippines. There is also the possibility that other unexamined factors are responsible for m-banking diffusion. A final consideration is that because each country is different (politically, culturally, economically), the case of m-banking in the Philippines may be very different than the case of m-banking in another country.