FinDev Blog

A New Financial Syntax for Illiterate and Low-literate People

Building on oral approaches to money management to broaden digital financial inclusion in Pakistan
My Oral Village and MicroSave conduct a focus group on oral information management (OIM) with factory workers in Ludhiana, Punjab, India. Photo by Brett Hudson Matthews, My Oral Village.

Illiteracy is a rarely acknowledged barrier to financial inclusion. Digital solutions that work well for literate people often fail to support inclusion among the estimated one billion adults worldwide who cannot read or write. This challenge is highly visible in Pakistan where UNESCO data shows that 52 million people ages 15 and older (roughly 40 percent of this segment ) were considered illiterate in 2014. As the chart shows, illiteracy disproportionately affects women. And while the current generation of youth are starting to fare better, illiteracy persists. It therefore cannot be disregarded when pursuing broad financial inclusion.

Financial service providers (FSPs) such as banks, telcos, remittance firms and fintechs, aim to expand financial inclusion by leveraging the country’s 161 million mobile phone subscriptions. However, to date, Android-based mobile banking apps in Pakistan are only for users who are literate in English and can input numbers (i.e., who understand that a particular string of digits represents a specific ordinal value, and that the number of digits encode orders of magnitude.)

Profile of Pakistan's Financial Sector
# of banks / branches 45 / 15,033
# of internet banking users (28 banks) 3.4 million
# of mobile banking users (21 banks) 3.6 million
# of banks w/branchless banking 9
# of branchless banking accounts 47 million
Share of branchless banking accounts held by women 20%

Source: Payment Systems Review, Branchless Banking (State Bank of Pakistan)

With approximately 68 million active smartphones in Pakistan, a number which continues to rise rapidly, smartphone use among the oral population – comprised of illiterate and low-literate people – is set for rapid growth. The challenge for FSPs is to develop and roll out mobile banking applications that can be easily used by this oral segment. This is fundamental to achieving broad, sustainable financial inclusion.

Building on oral approaches to money management

Our My Oral Village (MOVE) colleague, Brett Matthews, has defined financial numeracy skills as those needed for “carrying out a financial transaction with understanding, in real time.” Many FSPs and financial product designers assume that because most Pakistanis can dial a mobile number, they have the skills to use a mobile money app. But dialing a mobile number only requires a user to copy a series of digits into a phone. To send money involves composing a unique multi-digit numeral string (e.g., the “2” in 200 indicates the value of two hundred whereas in 2,000 it indicates two thousand and is an order of magnitude greater). If just one digit is off, users can accidently make an error greater than a day’s earnings. With this error risk, as well as the time pressure common in digital transactions, it is understandable that an illiterate or low-literate person could feel insecure when forced to write a digit-string to transfer money over a mobile phone.

Compared to literate adults, illiterate and low-literate adults have different capabilities and needs in using digital interfaces. It is not that these oral individuals cannot handle numbers – rather, it is that they understand and use time-tested oral approaches that differ from those employed by the text-inspired apps designed and used by literates.

To enable Pakistan’s oral citizens to easily and securely access digital finance, MOVE is carrying out field research to inform our development of Android-based Oral Information Management (OIM) tools that reflect principles of human-centered design and assistive technology. Oral people tune in to the colors, images, and sizes of bills and coins, enabling them to carry out simple transactions. MOVE’s OIM solutions use cash images as a proxy for large numbers. These are complemented with oral iconography (see image for examples) and metaphors (e.g., a counting table or an event tree). This is designed to create a safe and friendly gateway into the literate world where time-value of money refers to calendars and monetary value, not the familiar seasons and common stores of value such as livestock or home construction material. All our designs are grounded firmly through fieldwork that systematically builds interfaces based on oral people’s expressed needs and wants.

A New Syntax for Digital Finance

It is often claimed that digital voice (think Alexa, Siri and other digital voice assistants) will pave the way to financial inclusion for illiterate adults. However, the vast number of languages spoken by low-income and illiterate people – and unavailable in digital voice assistants  – indicate that this solution is a long way away. Linguistic diversity is very evident in Pakistan, with six major languages and nearly 60 dialects in total.

From the user’s perspective, OIM is treated as a separate language version of a mobile money app – one that employs images of currency and oral iconography rather than alphanumeric code. This approach gives users a shortcut past the many sources of confusion resulting from partial knowledge of second or third languages, different alphabets and symbols, and contrasting reading directionality (i.e., left to right, right to left).

Potential users

An OIM-based app could be especially helpful to Pakistani women, who are more likely to lack financial numeracy skills due to limited educational opportunities and gendered social norms which leave money management to men. The app could be used by many segments of women, including:

  • Widows and other female household heads. The World Bank estimates that 11 percent of all households in Pakistan were headed by women in 2013.
  • Women who must fill in for male family members who are sick, traveling, or working overseas, etc.
  • Members of kmatyi (Urdu for savings group; in Pakistan, almost all are comprised of women).
  • Female entrepreneurs.

Illiterate and low-literate men – especially those who must use bank accounts for employment or enterprise – can also benefit. We see adoption of OIM solutions spreading through families. Urban migrants can often afford smartphones and 3G/4G services and need easy and secure ways to send earnings home. We believe that they will embrace an app that they can share with loved ones in their home villages.

My Oral Village aspires to foster improved use of savings and other financial services and to equip families to better manage their finances. OIM can also increase the documentation of financial transactions to inform government fiscal planning and regulatory activities, including consumer protection. An app that an estimated 52 million illiterate people could confidently and securely use would do much to build a more inclusive national financial sector.

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