CAPACITIES TO ASPIRE AND CAPACITIES TO SAVE: A GENDERED ANALYSIS OF MOTIVATIONS FOR LIQUIDITY MANAGEMENT APRIL 2015 Capacities to aspire and capacities to save: a gendered analysis of motivations liquidity management by Susan Johnson, Centre for Development Studies, University of Bath Field research is always a privilege. Respondents gave willingly of their time and engaged in very interesting discussion – we enjoyed meeting them. My thanks to the Digital Divide Data team for making this research such a pleasure to carry out. Julie Zollmann and Michelle Hassan were key players in setting it up, and research assistance was ably provided by Anne Gachoka and Joe Adero. Amrik Heyer of FSD Kenya provided intellectual inspiration. Thanks also to Liz Graveling for assistance with data coding and analysis, and Isabelle Guerin for comments. Of course, any errors and omissions are my own. This report was commissioned by FSD Kenya. The findings, interpretations and conclusions are those of the authors and do not necessarily represent those of FSD Kenya, its Trustees and partner development agencies. FSD Kenya Financial Sector Deepening The Kenya Financial Sector Deepening (FSD) programme was established in early 2005 to support the development of financial markets in Kenya as a means to stimulate wealth creation and reduce poverty. Working in partnership with the financial services industry, the programme’s goal is to expand access to financial services among lower income households and smaller enterprises. It operates as an independent trust under the supervision of professional trustees, KPMG Kenya, with policy guidance from a Programme Investment Committee (PIC). Current funders include the UK’s Department for International Development (DFID), the Swedish International Development Agency (SIDA), and the Bill and Melinda Gates Foundation. Government of Kenya CAPACITIES TO ASPIRE AND CAPACITIES TO SAVE • i Table of contents ABBREVIATIONS ii Chapter 5 LIST OF FIGURES & TABLEs iii ASPIRATIONS AND THE CHALLENGE OF LIQUIDIty 13 EXECUTIVE SUMMARY v MANAGEMENT 5.1 Responsibility and the demand for liquidity management 13 Chapter 1 5.2 Shame as motivation for saving 14 INTRODUCTION 1 5.3 Developing and sustaining the capacity to aspire 15 Chapter 2 5.4 Life-cycle dynamics 16 BAckgROUNd 2 Chapter 6 2.1 The capacity to aspire 2 CONclusIONs 19 2.2 Aspirations, resources and finance 3 Chapter 7 Chapter 3 IMPLICATIONS FOR Low-inCOME FINANCIAL SERVICE 21 METHODOLOgy 5 DEVELOPMENt Chapter 4 ASPIRATIONS, RESOURCES AND GENDER 6 REFERENCEs 22 4.1 Women, aspirations and resources 6 ANNEXES 23 4.2 Men, aspirations and resources 8 A1 Research methodology: further details 23 4.3 Discussion: aspirations, gender and finance 10 A2 ‘Upliftment’ and the case of the lost brother 24 ii • CapaCities to aspire and CapaCities to save Abbreviations ASCA Accumulating savings and credit association FSD Financial Sector Deepening of Kenya HIV Human Immunodeficiency Virus ILO International Labour Organisation KSh Kenya Shilling MFI Micro Finance Institutions NGO Non Governmental Organisation NHIF National Hospital Insurance Fund ROSCA Rotating savings and credit association, merry-go-round RR Resources received, referring to all gifts and remittances entering a household from non-members of the household US$ US dollar CAPACITIES TO ASPIRE AND CAPACITIES TO SAVE • iii Figures and tables Table 1: Respondents by marital and household situation, location and gender iv • CapaCities to aspire and CapaCities to save Ships at a distance have every man’s wish on board. For some they come in with the tide. For others they sail forever on the horizon, never out of sight, never landing until the Watcher turns his eyes away in resignation, his dreams mocked to death by Time. That is the life of men. Now, women forget all those things they don’t want to remember, and remember everything they don’t want to forget. The dream is the truth. Then they act and do things accordingly. — Zora Neale Hurston, Their Eyes Were Watching God CAPACITIES TO ASPIRE AND CAPACITIES TO SAVE • v EXECUTIVE SUMMARY Liquidity management is a future-oriented activity; therefore, this research material resources and endowments, by the gender norms of their domestic sets out to assess the role that differences in women’s and men’s aspirations roles and the cultural norms of authority (e.g. being under the authority of might play in the ongoing, gendered gap in access to financial services. The husbands or male relatives). ways in which this future orientation operates in the lives of low-income people has been little analysed from a cultural and social perspective, though The link between this discussion of capacities and aspirations and the use it is increasingly studied in economics using the concepts of behavioural of financial services can be made at two levels: the first is the way in which economics. We draw on the concept of the ‘capacity to aspire’ as a means of aspirations directly generate a demand for liquidity management – as approaching the link between action and goals for wellbeing. Appadurai saving or borrowing – in the bid to achieve them. The second is the way in (2004) argues that culture provides visions of the future which have strong which managing one’s immediate responsibilities in life has moral content moral frameworks and which motivate goals. However, they are not which relates to how the ‘good life’ is lived and hence the social and cultural experienced similarly by everyone and poverty affects the development of this norms of behaviour that are involved and provoke the need for liquidity vision. management. At its extreme, fulfilment of the moral dimension is motivated by the avoidance of shame. This analysis suggests therefore that liquidity is The research involved 42 in-depth interviews with respondents who were not solely, or perhaps even primarily, a function of the financial instrument part of the Kenya Financial Diaries research project, funded by Financial itself and the transactions costs (physical or financial) of operating it, but is Sector Deepening (FSD) Kenya and the Bill & Melinda Gates Foundation also constructed by people on the basis of these deeper aspirations. Those and implemented by Bankable Frontier Associates and Digital Divide Data. with stronger capacities may manage the self-discipline of voluntary savings In the interviews, respondents shared an overview of their lives and the instruments with greater ease, while others are motivated to seek out liquidity achievements and challenges they had faced. The analysis, first, presents an features that support their decisions and aspirations. overall perspective on what these narratives tell us about low-income people’s visions of the future and, second, discusses how these connect to liquidity But as Appadurai indicates, the capacity to aspire is not evenly bestowed: it management and the use of financial services. The report uses two extended is influenced by poverty and social status. Moreover, it can be undermined case studies to discuss the dynamics of aspirations and action and to develop by the myriad shocks and exploitative or disadvantageous circumstances the basis of a wider discussion based in the data. (including within social relationships) that make aspiration itself a potentially risky business. At the same time, the capacity to effectively manage liquidity Overall, men – and particularly younger men – were more articulate than and achieve aspirations is not static but is dynamic and emergent. That is to older people and young women about their goals and their strategies for say, it is enhanced or undermined by everyday actions and interactions, and achieving them. Their accounts openly revealed aspirations to material wealth the responsibilities that seeking to live a good – or at least better – life entail. and social status than the female respondents, while women indicated their Most compellingly, the responsibility of providing for one’s children can enable visions of a good marriage, having children, and educating them. However, it a dynamic change. was clear that women too wanted to meet their material needs and achieve a comfortable lifestyle, and that marriage and children’s education were also More broadly, life transitions that lead to responsibility for providing for others important to men. Therefore, while visions of the ‘good life’ differ in terms of are strongly related to the achievement of life goals. In particular, the shift emphasis, the underlying vision of what ‘a good life’ is or how it is achieved, from dependence to adulthood and new forms of inter-dependence with does not fundamentally differ between men and women. others was evident. This transition generates new demands for liquidity management – the need to pay rent, to manage one’s own consumption, to For both, the key strategy to achieve ‘upliftment’ is a strategy of investment support siblings with school fees, and so on. Having a child or getting married that is at once social and financial. This social dynamic involves a process that also produces new dynamics. All of these are particular times at which is collective, shared or mutual and which enables aspirations to be developed new demands for liquidity management are generated and new meanings and sustained. Men frequently searched for others ‘above’ them who could experienced. act as role models – to inspire them and with whom they could ‘construct something’ through advice, connections and finance. Their search is for those The gender gap in access to