Building on research in Oral information management tools (2014), My Oral Village announces the publication of new research into oral cognitive capabilities and practices as they affect financial inclusion.
The paper, entitled Oral financial numeracy: a hypothesis and exploratory test, is based on financial numeracy tests of eighty illiterate individuals in Cambodia and Tanzania (a briefing note on this research was previously published here). It inquires into levels of financial numeracy on several dimensions: from reading written Indo-Arabic numerals and mental calculating, to applying modern time-measures and using calculators and mobile finance tools.
The field results provide support for the hypothesis of Walter J. Ong, the dean of the study of oral culture, that the habits and practices of pre-literate culture continue to powerfully shape human incentives and behavior in communities where the historic processes driving the emergence of mass literacy is still underway. Paper money, like the mobile phone, is a tangible product of literate culture that oral people will use. Both paper money and phones however, are used differently in oral culture, under the constraints and opportunities provided by oral cognitive capabilities.
Cash is only partially accepted by oral adults. As use of paper money gradually intensifies, oral adults adapt more easily to its role as a medium of exchange than to its role as a store of value. Observations in both countries show far better facility with counting and mentally manipulating cash value, than with reading or writing the longish Indo-Arabic numeral strings (e.g. “107,500”) that represent the lifeblood of digital finance, especially in countries with low currency values.
Small numbers can be important to traditional livelihood activities, and illiterate adults can often read and write 1-2 digit numbers. They also show surprising ability to mentally process much larger numbers (e.g. 100,000 ÷ 5) in spite of their inability to read or write them. This appears to reflect the need to adapt to an increasingly monetized exchange-economy.
The modern calendar, which defines the ‘time’ dimension of ‘time-value of money’ at the heart of financial services, is known to oral adults, but not commonly understood or used. It appears to be, like large numbers, irrelevant to traditional livelihood activities, which depend instead on non-standardized natural and event-based measures, such as the seasonal value of livestock, or the value of a neighbour’s promise to planning a wedding.
While there is little literature on this subject, the study includes reviews of some of the related literature, and the light it casts on financial numeracy among oral adults in developing countries. The review touches on studies by Geoffrey Saxe on the cultural development of numeracy among the Oksapmin in Papua New Guinea, Terezinha Nunes on street mathematics in Brazil, Helen Abadzi on numeracy in primary schools in the developing world, Pierre Pica on the approximate number sense, and Stanislas Dehaene on the development of the ‘mental number line,’ among others.
Digital payments and transfers are well aligned with oral practices and habits that embrace cash as a medium of exchange, and so have more appeal to this segment than digital current accounts, savings, or insurance. But many oral adults still opt out of mobile payments by depending on the village ‘agent’ to conduct the transaction, eschewing independent use because they can’t make sense of Indo-Arabic numerals. Similarly, they rarely use the calculators that come with their mobile phones, even if they frequently conduct buy and sell products in the markets.
As Stanislas Dehaene, a prominent cognitive neuroscientist and author of The Number Sense, explains: “The sharp limits of our short-term memory explain the constant [historical] drive towards a compact notation for large numbers.” The ‘place value’ code at the heart of any written Indo-Arabic number longer than two or three digits is both a powerful cognitive tool for those who can use it, and powerful barrier to entry to the modern world for those who can’t.
There are a number of potential ways to address the challenges of financial inclusion within the oral segment. They begin with an understanding that paper money is an intermediate form of counting and calculating that forms a cognitive bridge between traditional oral numeracy and modern literate numeracy.
Modern financial services providers and interface designers, so deeply immersed in literate culture that it has become invisible, must also devote more attention to empirical testing of what oral individuals really understand about their interfaces. Do oral users understand that the navigation syntax is top-to-bottom, left-to-right? Can they read a calendar, or use a calculator? If not, why? What design elements can be used to correct for this? My Oral Village has developed a series of principles, practices and open-source examples of oral information management for financial inclusion.
While mobile phones cannot overcome basic capability and incentive gaps by themselves, their enormous capabilities, if deployed with awareness of these gaps, can achieve far more than they are currently.