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M-Pesa

Paying teacher salaries with mobile phones

Michael Trucano's picture

no worries, everything here and orderly and under control, all money is being accounted for in a clear and timely mannerI often find that a sure way to generate rather heated discussions in many quarters is to bring up the topic of teacher salaries. They're too low! or: They're too high! They should be linked to [insert some sort of 'performance indicator']! or: Attempts to link them to [insert name of a performance indicator] are misguided (and perhaps even dangerous)!

I'll leave it to others more informed and expert than I am to weigh in on such (often quite contentious) debates. However one might approach such discussions, and whatever conclusions one might draw from them, there isn't a lot of debate about one issue related to teacher salaries that has been well documented, and widely (and rightly) deplored.

Many teachers around the world suffer as a result of poorly-functioning systems to pay the salaries [pdf] they are due [ppt]. This is especially problematic, and notable, given that teacher salaries have for many decades constituted huge percentages of the overall education budgets in many countries. As a World Bank publication from a few years ago (Teachers for Rural Schools : Experiences in Lesotho, Malawi, Mozambique, Tanzania, and Uganda) laments, "Teachers in remote schools are [compared with their colleagues in more urban areas] more likely to be the direct victims of administrative failures, which undermine teacher morale and damage the system. One frequently mentioned administrative failure is the delay in paying teachers’ salaries and allowances." An 'administrative failure' of this sort can have many causes. Even where sufficient budget exists to pay teachers, flawed teacher salary systems, poor internal controls, logistical challenges related to transport, and corruption can conspire to ensure that in many places, especially in rural areas in poor countries, teacher salaries are sometimes paid only infrequently, often with great delay. The results of this can be devastating for education systems -- to say nothing of the impact on individual teachers, schools, students and local communities.

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Back when I worked with the World Bank's infoDev program, one of my responsibilities was to serve as a point person on 'mobile money' issues, briefing groups on emerging lessons and experiences from nascent activities to use mobile phones to transfer money from one person to another. I left infoDev in 2008, just as activities in this regard were really starting to heat up (Kenya's M-Pesa program, the best known 'mobile money success story', launched in 2007), but continued to meet semi-regularly with folks -- colleagues from the World Bank and other international donor agencies, government officials, NGOs and foundations, businesspeople, researchers -- who were interesting in exploring how new mobile payment options might be used in inventive ways to help address some longstanding developmental challenges. (Those totally new to the topic may benefit from watching this short video from CGAP, which demonstrates how mobile money activities look in practice.) Most of these conversations, as it happens, included considerations of how money transfers via mobile phones might be used to ensure that teachers got paid, in full and on time. As I prepare for a trip next week to the Mobile World Congress in Barcelona, I realize haven't fielded one substantive information request related to this topic in the past three years.

Up until about 2010, I met quite often with groups who were looking for creative ways to help address the 'paying salaries to teachers in rural areas challenge' and who had seized on the idea of taking advantage of the increasing ubiquity of mobile phones in such areas to help fashion some sort of 'solution'.  In the last three years, however, the volume around these sorts of discussions in many quarters has almost died out. Part of this might be explained by the fact that there are now many 'experts' on mobile money issues, people much more expert and well informed than I am about related issues, and so I simply might be 'out of the loop'. (Back in the 'early days' of work on this topic, I could never shake the nagging feeling that the reason that I was approached by so many groups for related information and advice was at least partially a result of the 'in the valley of the blind, the one-eyed man is king' phenomenon.) That said, given that a regular part of my daily work at the World Bank is to field questions related to the use of new technologies in education in all sorts of ways around the world, and that a lot of my job isn't so much about in providing answers, but about helping people formulate better questions, the fact that this question seems no longer to be a topic of much discussion makes me wonder:

Whatever happened to the idea of paying teacher salaries with mobile phones?

What’s Next for Mobile Money?

In recent years, mobile money has attracted sustained attention in ways that few other mobile services have. And for good reason: from East Africa to Pakistan, the Philippines and elsewhere, mobile money services are growing and diversifying into fields such as savings and insurance. Kenya-based M-PESA remains the global leader, and the benefits from increased market efficiency, consumer risk-sharing and third party utilizations are significant. But mobile money can no longer be considered an isolated phenomenon, and as it matures, a variety of new challenges and benefits will influence its developmental potential.

Mobile money is changing the financial landscape around the world. What's next? (Credit: Flickr Creative Commons, Gates Foundation)

Although it is notoriously difficult to make predictions about such a fast-moving and wide-ranging industry, in the new edition of Information & Communication for Development 2012, we highlight some emerging issues in mobile money that will likely become relevant in the upcoming years.

Addressing the Digital Divide

Tanya Gupta's picture

Perhaps the biggest challenge to harnessing technology for economic development is addressing the digital divide.  How can we do so?  This is a big question and to answer it comprehensively by looking at all the work on this area is beyond the scope of this blog. However let’s look at a few obvious ways of overcoming the digital divide:

(1) Development projects that focus on, and are relevant to the poor.  The Monitoring of Integrated Farm Household Analysis Project (IFHAP) was conducted every five years from 1996 to 2007 in the thirty-three (33) major rice- producing provinces in the Philippines.  The study noted the potential of mobile phones as key tool for information dissemination in agriculture as they are widely owned. In 2007, 90% of the farm households surveyed owned at least one mobile phone.  I agree with the authors of this study that while policy, infrastructure, and digital divide do indeed aid in assessing readiness; a social dimension is also present, which we ignore at our own peril.

Mobile phone technology and remittance services for the poor

Dilip Ratha's picture

  Photo - istockphoto.com
At a meeting with CGAP (Consultative Group to Assist the Poor) colleagues yesterday, I tried to barter my limited knowledge of remittances for their extensive knowledge of mobile technology and its vast potential to serve the poor. It occurs to me that among others, there is one more compelling reason for applying mobile technology to remittance services: the bulk of poor migrants tend to travel short distances, mostly within the country or to neighboring countries just across the border, and a large number of them stay within the calling range of domestic mobile phones. Such migrants typically cannot have bank accounts in the host country, and in any case banks do not want to serve them. These migrants rely on friends (or strangers) going home or hawaladars to send money home. More recently, it appears that they have discovered the idea of transferring mobile phone minutes. M-Pesa in Kenya has done well by capitalizing on this technique. Other mobile providers are also beginning to offer mobile phone remittances.

Mobile money platforms for agricultural micro-insurance

Sanket Mohapatra's picture
   Photo © WorldBank/Flicker

An Economist article discusses how a “private-private-NGO” partnership between Safaricom (the parent company of Kenya’s mobile money transfer service M-Pesa), an insurance company, fertilizer and seed companies and an agricultural foundation has produced an innovative micro-insurance scheme in Kenya. The crop insurance scheme, called “Kilimo Salama” (safe farming in Kiswahili), collects insurance premiums using M-Pesa when farmers purchase seeds and fertilizers, and in the event of adverse weather, makes payouts directly into the M-Pesa mobile phone accounts of the farmers.