One of the projects involves the analysis of exploratory user research on a Prepaid Economy Project – seeking to understand how those who live on irregular and unpredictable incomes manage their household finances.
A short summary of our early findings is posted here:
“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 manipulating 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 maneuvering is essentially to increase the ability to plan AND decrease the variance between Income and outgoings.”
Also on the project blog are posts on:
- Some thoughts on community based models for sharing costs
- Identifying factors that could improve the success of business models meant for the BoP
- User profiles documented from field trips to The Philippines and India
- Interviews submitted remotely from Malawi
Apparently, Niti told us, Helsinki has ambitious of becoming a knowledge centre on Bottom of the Pyramid issues, and more research can surely be expected, most likely involving also the new Alvar Aalto University through its brand new Design Factory.
[...] internet in the same way that pay-as-you-go (prepay) airtime was/is important to voice telecom – prepay/satchel pricing is a mainstay of pro-poor approaches for “Bottom of the pyramid” customer…. There is a great deal of hope (and hype) right now that mobile access to the internet will [...]