Education is a powerful tool to combat poverty. Each additional year of education increases an individual’s earnings by 10 percent for men and 20 percent for women. But poverty also prevents many children from attending school. Globally, 263 million children and youth remain out of school. Even those in school are not learning basic skills, often because families lack the funds to keep children in school consistently.
Digital finance can remove systemic barriers to high-quality global education in at least three ways:
- Digitizing school fee payments decreases the time and cost of making payments for families, improves cash flow management by enabling incremental payments and creates opportunities to mobilize funds from social networks. Digitizing payments also helps schools decrease cost of collecting fees, improve record keeping, plug revenue leakages and improve school governance.
- Digital savings and credit products can help parents stay on track with education savings, flexibly pay school fees and keep children in school, which in turn improves academic performance.
- Digitizing teacher salaries decreases the time and money teachers spend to collect their pay, which reduces time spent outside classrooms.