Delivering on Education for All: The Role of Mobile Money

Parents worldwide want their children to have greater opportunities than they did, and education can be the ticket. The Sustainable Development Goals call for free, equitable and quality primary and secondary education for all by 2030. But for many low-income families, education can be out of reach as they struggle to cover the cost. An estimated 263 million children and youth between the ages of 6 and 17 are not in school – many because their parents simply cannot afford it. 

Graph showing number of children and youth out of school
Source: Global Education Monitoring Report, Policy Paper 27/Fact Sheet 37

Even in countries with free primary education, parents must still pay for other expenses, such as books, uniforms, supplies and exam fees. In 12 African countries, these nontuition expenses make up 56% of the household’s education budget. And in many countries, secondary school is not free, resulting in a sharp drop in enrollment after primary school. Private schools are also a popular educational choice, even for cash-strapped families. In Kenya, an estimated 40% of kids living in slums attend private schools – a number that has actually increased since primary school became free in Kenya in 2003.

Aside from the underlying problem of not having enough money, low-income families face additional hurdles when it comes to paying for education. The typical school fee schedule requires payment at the beginning of each term, but this schedule does not always correspond to when many families have money available. Being poor often means your income is unpredictable and daily needs come first, such as expenses for food, medical care and housing. When a crisis hits, like a death or illness in the family, or during major income slumps, parents may be forced to keep one or all of their kids home from school as fees cannot be paid.

Mobile money and digital financial services have the potential to help families overcome some of these challenges, as explored in a new working paper and new video just released by CGAP.

Mobile money solutions

Take Hawa Oketch, a street vendor living near Nairobi. Two of her children attend Bridge International Academies, a chain of low-cost private schools, and her eldest son is enrolled at a public secondary school. To pay her son’s secondary school tuition, Hawa must go through the time-consuming process of traveling to the bank and standing in long lines. It can easily take an entire day to make this payment, and it prevents her from selling her goods that day. But to pay for her younger children’s tuition at Bridge, she simply pays from her phone using mobile money. Immediately after she pays the fees, she gets a message confirming receipt.

Like many people in her neighborhood, Hawa’s income is erratic. At the end of every work day, Hawa loads up her earnings into a mobile money account, putting funds aside when she can into a mobile savings account earmarked for school fees. For families who are unable to pay the entire amount at the beginning of the term, Bridge works with them to develop a schedule that allows families to make small payments over time.

“They can actually put money into their pupil’s educational account when they have it. So in a sense, it acts like a savings account for them to save for their child’s education,” said Tanaya Kilara, with Bridge.

The cashless system being used at schools like Bridge also benefit teachers who get paid into their mobile accounts, curbing the need to take time out of the classroom to travel to the bank.

In some cases, there just simply isn’t enough money in the household budget to cover the cost of education. Research in Uganda found that for the 38% living below the poverty line of US$456 per year, the cost of sending their children to school far exceeds their income. For instance, the cost of sending a child to primary school is US$111-184 per year, and for secondary school it is US$207-600 per year. No amount of savings discipline will change the financial picture. For these families, financial support in the form of remittances, scholarships or other social safety net programs are the most appropriate tool to alleviate the financial burden of education, and these, too, can benefit from digital payments.

In Kenya, for example, the iMlango Programme is using smartcards not only to monitor student attendance and other academic activity, but also to provide stipends to families struggling to meet the cost of educating their children.

“The technology allows them to have multiple wallets in one program. They are using the smartcards to pay for food at local stores who are signed up with the program,” explained Bruce Kaniu, general manager of sQuid, whose company manages the program.

The long-term impact of these digital innovations for education are unclear, but for parents like Hawa it is making life a little easier. “I would like them to get an education so that they can have a better life than me – to have a life where they can be independent,” Hawa said.

Digital finance will not resolve many of the complex reasons that keep children from attending school. But there is potential to help those families who struggle with the cost of education by providing them with better tools that can help them save, plan and make education payments without losing productive time or selling assets prematurely. 



Innovations in digital finance can play a role in the Sustainable Development Goals' aim to “ensure inclusive and equitable quality education and promote lifelong learning opportunities for all.”

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