[Reader-list] On Kafka and 'unintended benefits' of smart cards.

[Taha Mehmood]

Dear All,

In his essay on Kafka, Adam Kirsch explains the term“Kafkaesque” as
thus: 'the nonchalant intrusion of the bizarre and horrible into
everyday life, the subjection of ordinary people to an inscrutable
fate'. While reading all sorts of literature about the national
identity card, smart card, surveillance technologies  etc I have often
thought about the effect of these technologies on our lives and quite
unlike the doomsdasque  'horrible' as Kirsch mentions, for me it
appears, as if, like everything else some Indians are going to
celebrate the coming of this new technology in their own way, while
others are going to be paranoid about it , others still will not care
about it at all or in a uniquely Indian fashion, will 'adjust' with it
somehow.

Otherwise how else could one explain that a product made mostly of
strontium titanate, silicon, some circuits compressed between two
strips of plastic could be regarded as token of 'respect', 'glamor'
and 'dignity'. I wonder if Kafka had been around, how he would have
thought of this rather 'nonchalant intrusion of the 'bizarre' into the
everyday live of the Indians.

The blog post below is about how 'poor people' living in 'slums' of
Dharavi are buying a Rs200 ICICI smart biometric bank card, not only
because they want to deposit money, but also because, as according to
one Mr. Amitabh Saxena-

'But what about the customers who carried no balance? Their revealing
response: the smart card, complete with their name, thumbprint, and
photo, acted as a identify card, and when combined with the adored
ICICI logo, one that commanded respect. India does not have a national
ID card. The smart card, in effect, provided them with an identity. We
received comments like, “I just like to show that I have an account,
it doesn’t matter if I have a balance or not” and “If you are going at
night and you clash the police then you can show them this also.”

Of course!!

However what I find interesting in an argument mentioned above are two
underlying assumptions- first that, 'poor people' living in 'slums'
DO NOT have any other form of VALID identification with which they can
pacify the police and second, even IF their identification is VALID
then our law abiding, gentle, humane, efficient, honorable police
force will let them go, without any harassment.

In this regard let's imagine a scenario which, I am sure,  is going to
be a typical case, in the beautiful world of 'smart cards' .

It is long past midnight. The streets of Bombay are deserted. Ramu and
his brother Lalu, who are from Narkatiya district of Bihar, but who
have been living in Bombay for the past ten years are coming back
home. They meet Pandu havaldar. Pandu's beat is Dharavi. Pandu is
driving a motorbike. Pandu's colleague Shinde is also driving with
him. Pandu is drunk. Shinde is not. They spot Ramu and Lalu who are
walking home after a back biting 14 hour shift at a local factory.
Shnide finds their tired walk 'suspicious'. Pandu senses this
'suspicion'. They accost Ramu and his brother.

Pandu: Sir where are you going?
(remember we are in  'new' world now- post smart card world,
everything has 'changed')
Ramu: Home.
Shinde: What is your name Sir.
Ramu: This is Lalu and I am his elder brother Ramu.
Pandu: Can we see some identification papers please.
Ramu: Identification papers. Nnnno...I I I don't have any at the
moment but if you could walk with me to the basti which is just five
kilometers from here then, I promise, I will give it you.
Pandu: (Forgets for a moment that this is post smart card age) teri maa ki...
Lalu: (frighteningly) Takes out his smart card and gives it to Shinde.
Shinde: Inserts the card, in a portable reader.
The reader tells Shinde, about the name, age, address, thumbprints,
nearest to the kin etc, etc which also mentions Ramu's name.
Shinde: (Smiles) That is alright Sir. Thank you. Sorry for the
trouble. You have a shubha ratri.
Ramu and Lalu: No worries!!!
Ramu to Lalu: Thank GOD for this ICICI  smart card, now even the
police is helpless. With the new found, 'respect'. They laugh and walk
back home.

Please read below to learn more about the 'unintended benefits of
ICICI smart cards', perhaps it gives us a clearer picture of the
'intended benefits' of MNIC.

Regards

Taha

PS: Meanwhile a  RNCOS reports suggests that the, 'The global shipment
of smart card surpassed an estimated 5 Billion units in 2008 and this
figure is projected to surge at CAGR of nearly 11% through 2012,
according to "Smart Card Market Forecast to 2012”, a recent market
research report by RNCOS.'
( http://www.emailwire.com/release/20565-RNCOS-Releases-a-New-Report-Smart-Card-Market-Forecast-to-2012.html
)



________________________________________________________________________

http://centerforfinancialinclusionblog.wordpress.com/2009/03/31/some-unintended-benefits-of-improving-financial-inclusion/

Some Unintended Benefits of Improving Financial Inclusion

March 31, 2009 in Center for Financial Inclusion | Tags: Financial Inclusion

> Posted by Amitabh Saxena


The Oscar-winning movie Slumdog Millionaire is a fictional account of
one teenager’s tough life in the slums of Mumbai to eventually winning
the jackpot of a TV game show.   But would young Jamal spend all those
rupees or open a savings account to keep them safe?



Through ACCION’s support of its microfinance partner Swadhaar
FinAccess on Alternative Channels, I have had the opportunity a few
times to walk around some of Mumbai’s slums – Kurla, Malad, and
Dharavi (Asia’s largest) – and observe first-hand conditions there and
poor people’s savings patterns.  As an NGO, Swadhaar FinAccess is not
regulated to offer savings accounts but wanted to offer the “service”
to its poor clientele.  So in January 2008 it struck a
banking-correspondent agreement with ICICI, India’s largest private
bank, where it would set up, staff, and manage small “kiosks” (see
picture at right) in the poorer neighborhoods of Mumbai. Through these
kiosks, clients can open ICICI savings accounts and make basic
transactions, such as balance inquiries, deposits, and withdrawals.
While these special savings accounts designed by ICICI have fewer
options than regular savings accounts, apart from a 200 rupee ($4 USD)
smart-card purchase to open the account, they charge nothing for
transactions and come with few restrictions (e.g., no minimum balance,
less documentation to open an account).   In return, Swadhaar receives
a commission from ICICI for the number of new accounts opened, total
average balance, and transaction volume.



When I started analyzing the actual performance behavior of the
accounts last summer, Swadhaar FinAccess was operating four kiosks
through which the client growth had been rather respectable at nearly
3,000 customers. What surprised me, though, was that we found anywhere
from 75% to 93% of the accounts were not carrying any balance, and
roughly 63% of customers had never made a single transaction.  When
asked, ICICI said those figures were around the average for the
120,000 savings customers acquired through its banking correspondent
network of 40 NGOs.  That got us thinking: why would so many poor
people spend a hard-earned 200 rupees for the smart card to open the
account, only to rarely or never use it?



Why, indeed. Through focus groups of Swadhaar FinAccess savings
customers, we uncovered a number of reasons for this behavior.  Among
those who carried a balance, their decisions to open an account
stemmed from their impression of the ICICI brand, and its association
with “glamour” and the “middle-class.”  For this group, the ICICI name
also provided a sense of security – one of the most important features
in promoting savings – specifically using the metaphor of the bank
being a father-figure that “would help if his children [the customers]
ever got in trouble.”



But what about the customers who carried no balance? Their revealing
response: the smart card, complete with their name, thumbprint, and
photo, acted as a identify card, and when combined with the adored
ICICI logo, one that commanded respect. India does not have a national
ID card. The smart card, in effect, provided them with an identity. We
received comments like, “I just like to show that I have an account,
it doesn’t matter if I have a balance or not” and “If you are going at
night and you clash the police then you can show them this also.”



These comments reveal that a sense of dignity and self-respect were
the unintended benefit of the bank cards, and therefore, well worth
the 200 rupees for many clients.  This finding underlines the
importance of treating clients ethically and helping them understand
their rights and responsibilities with financial institutions, an idea
currently being promoted through the Center’s Campaign for Client
Protection.  Swadhaar FinAccess is interested in the role of consumer
protection in its operations and is working with the Center to learn
more about the 6 principles of client protection and how to enhance
their role in current operations.



Using these findings, Swadhaar FinAccess, with ACCION’s support, is
undertaking several marketing activities to increase overall usage of
the savings account, as well as implementing client education programs
courtesy of the Dell Foundation.  Stay tuned in the coming weeks when
I will write more broadly about product usage in alternative channels
(banking agents, mobile banking, debit cards) and how this affects
both the social and financial bottom-line of MFIs.



Amitabh Saxena is the Director of Alternative Channels at ACCION International.