This article is part 1 of a three part series on Diaspora, Mobile money and Education.
A month ago while reading about new education models being developed in East Africa I came up with a theory: ‘diaspora, mobile money and private sector schools will drastically improve educational attainment in developing countries’. Alone each area is changing economies in rapidly growing countries but together they could facilitate international money transfers to build the generation that will shift continents into high gear.
Diaspora are a group of dispersed people living around the world from a country of origin, (ex. Somali diaspora) and they often send back funds known as ‘remittances’ to relatives still living at home. My theory is that if provided with the opportunity to send back funds targeted for specific needs including education (directly to the school) the human capital or education level of emerging markets would increase. While in Kenya I witnessed the increasingly common use of mobile money, and several businesses are running entirely cashless. Most customers are already using a mobile money service (17 of 44 million Kenyans) and “about a fifth of Kenya’s GDP now flows through M-Pesa!” While living in Canada I’ve had to explain cashless business models to other entrepreneurs and I don’t expect Canadian businesses will shift off cash even while the vast majority of the population carries either credit or debit cards regardless of the efficiencies.
Why can’t an uncle pay the school fees of his sister’s kids directly thousands of miles away and receive a confirmation from the school either online or via mobile money ? As education is being privatized and companies including Bridge International Academies are using increasingly advanced technology I predict diaspora will shift to an easy payment method to direct money for education and other basic services including electricity along with sending small sums to relatives.
My experience with East African education started in May 2012 when Scott Andrews and I visited a school ICEF, a Vancouver charity supports in southern Uganda. We stayed for several hours, viewed the library, the medical clinic and watched the lunch meal program. With international oversight it ran quite smooth but was donor dependent living precariously on the edge with a couple fundraising events a year. A week later we shifted hotels in Masaka and were located across the street from a public primary school. As I had recently quit my job in Canada to embark on a 1-year trip I spent the first 2 weeks reading and writing on a balcony overlooking the schoolyard. I was surprised at how often the kids were playing in the yard and how little time they spent in the classroom. Also small single operator schools lack the ability to receive payments efficiently for hundreds of children, and are too small to spend resources on curriculum improvements. The Private sector is changing the game in India, Kenya and Peru with business models that provide an improved service in comparison to the public offering and are cost competitive! Think Starbucks for Eduction. Public education in Kenya requires parents to pay small fees or bribes providing low quality but medium cost service. New ventures are using advanced technology to improve efficiency and reduce corruption. Hopefully in ten to fifteen years the private sector will have entered most countries and provide an alternative to failing public systems which will shift donor dollars into other areas of economic development.