Source: The Guardian
Using digital finance to tackle development problems can improves lives, and offer innovative companies handsome rewards
Whether it is lack of access to water, energy or education, development professionals are well versed in the plethora of challenges facing billions of people. The traditional approach to solving these problems has been to think big – in terms of the millennium development goals, government aid programmes, or huge fundraising campaigns.
But there are dozens of startups and larger companies with innovative ideas who are approaching these challenges in new ways using digital finance. The success of M-Pesa, which reaches 18.2m registered users in Kenya alone, shows (pdf) how digital finance can become rooted in a country's economy, but success stories aren't limited to Kenya. Digital finance has taken off in countries as diverse as Bangladesh, where BKash [development] serves 8m registered users with payments and remittances through a network of 76,000 agents, and Pakistan, where EasyPaisa, the third largest mobile money deployment in the world, reaches 7.4m users. Chidi Okpala, director and head of Airtel Money – Africa, a mobile money service with an active base of 5m customers, sees mobile financial services "tapping in" to other areas like healthcare, agriculture, and education.
Bridge International Academies is one company that's already ventured into the education space in Kenya. Its "academy in a box" relies heavily on technology to deliver quality, affordable education to children whose families live on less than $2 a day. So far, the for-profit education company has enrolled over 80,000 students in the programme, which equips teachers with a tablet to deliver standardised instruction. Parents use mobile money accounts to pay the approximately $6 monthly fee, 40% cheaper than other low-cost private schools in the company's communities. Bridge makes the financially complicated process of paying for school easier for families by digitising it (94% of Bridge's families have mobile phones) and making it more affordable.