Our workshop officially ended today although there's still a lot of 'mopping up' to be done not to mention the final documentation. We had the opportunity to analyze groups of users observed and interviewed by me in rural Rajasthan (India) and a barangay in Iloilo (Philippines) as well as some basic personal financial management information on users sent in by John Lumbe from Malawi. Here is the quick and dirty, summary of our findings:
Broadly speaking, we saw far more sophisticated cash flow management than has either been expected or assumed by those who live on "irregular and unpredictable" incomes. In fact, one future task is to parse out whether the terms "irregular and unpredictable" can even be applied – at this moment, it seems as though it would be far more accurate to say that they do not manage on a 'fixed amount arriving on a predicted day/date' i.e. a salary. The second element to be reconsidered is whether those at the "BoP" especially in rural communities can even be accurately called the "poor" – living on $2 a day is one thing, but quite another when much of the hyperlocal economy may not even be based on actual cash.
Cash flow and working capital is managed by manipulting a combination of elements such as experience – a farmer can look at his fields and guesstimate the next harvest's yield and approximate timing; social capital in the community – whom to lend, borrow from or do 'business with'; spreading risk across multiple sources of income and finally, the control over two key elements – time: as in periodicity and frequency and money: as in amount and also "form" (is it cash or a good?).
The aim of all of this complex maneuvring is essentially to:
Increase the ability to plan
Decrease the variance between Income and outgoings
That is, we observed a pattern of behaviours across the various geographies and range of "bop" income levels (the Indian community being the 'wealthiest' while the Malawians living closest to the edge) such as:
1. Maintaining multiple sources of income simultaneously
2. Allocating multiple resources (for the same function) according to cost
3. Managing a "portfolio of investments" that act as deposits maturing over different durations of time (the shorter turnaround of a chicken ready for sale or consumption versus the longer term investment in a harvest of wheat)
All of these behaviours also serve to provide a cushion against the impact of shocks, both predictable and random.
In essence, it was pointed out to us that this demographic we were studying displayed patterns of fiscal management closer to that of diversified corporations than individual customers.