Ismael Moya | Université Paris Nanterre, MAE, LESC – Quelques éléments sur l’argent et la finance populaire à Dakar

Dakar – In a poor neighboorhood

  What do poor people do with money and the lack of it? There is here no distinction between intimacy and public life when it comes to money, contrary to Europe or US. No meaningful relationships are possible, especially intimate, without money involved.

  Money is everywhere but at the same time everyone is looking for money all the time, however rich or poor. This scarcity of money is related to permanent monetary relationships between people, economic or not. And because of social solidarity whoever has money is confronted to permanent demands for money from relatives.

  That is why people try to put their money away, in distant banks, out of reach, and especially in collective schemes to reduce the liquidity – thus the success of tontines. Liquidity is thus avoided. Savings come in non-cash version. The problem is to get the cash back when you need it. One could say that wealth management is based on a « preference for illiquidity », which comes with a very high velocity of money, that can be seen in the poor state of banknotes.

  Most financial networks are managed by women and these networks are the structure of social life.

  This modus operandi is also made possible because of the stability of the CFA, that makes this preference for illiquidity possible. People have a complete confidence in the CFA.

  The illiquidity is not only an economic device, it is part of the social life and structure. Agency hinges on the ability to convert liquidity in relations and the reverse.

  It explains why it is so hard to find capital funds to start a business, why life cycle events can synchronize all financial networks and produce huge amounts of cash – up to 1 or 2 years of a household revenue, collected in a few days and distributed in one single evening in hundreds of gifts.

  This financial system is also backed by financial practices: women keep very precise accounts of the sums involved in ceremonies. All ledgers are kept. These account books are just lists, no sums: women do not think in terms of capital or assets, only relationships. They never calculate the amount of money they can mobilize: it is not precise but very efficient. And there are no boundaries between spheres and means of exchange: the same money is used, and there are no moral boundaries between spheres of exchanges. Thus, there is no need for conversion processes. But it is hierarchized in terms of agency, the capacity people have to distribute and collect money. And the system is dominated by social and familial values over economical values. That is why the economy suffers from the illiquidity preference.

  However this system has given the possibility to use these networks to back nanofinance to start businesses. Here, relations are a substitute to capital. And that works, because in a system that draws on illiquidity preference, any liquidity put into the system has a very high price. And people are willing to pay it. This system is not specific to the poor, but the rich have a very different access to banks and capital: they can back their loans with actual capital.

Abstract of workshop : Money of the poor (4 – 5 July / Juillet 2019)
Organization : Patrice Baubeau, U. Paris Nanterre / IDHES (UMR8533)
Grant UPL (Université Paris Lumières) 2019/2021

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