EdTech is one of the hottest trends in Silicon Valley. Laurene Powell Jobs, an American executive and founder of the non-profit Emerson Collective, is working with technology to redesign the American school curriculum for the 21st century, while schools are increasingly using technology to teach. The picture in emerging markets is different. Although technology is often non-existent in the classroom, digital tools are being used by parents to pay school fees and a growing number of companies are providing e-learning tools outside of the classroom. This Mondato Insight looks at EdTech in the developing world, and the importance of digital payments within this new ecosystem.
Problems at School
Although education is important for upward mobility, 124 million children globally do not attend school due to lack of family finances. In some of the poorest countries, where often there is no access to free education, low-income families may have to send children to fee-charging private schools, and in some instances, even fee-charging state schools. Even if there are no school fees, parents must often pay for books, uniforms, supplies and exam fees. Education can be the second largest expense of a family after food, which can be challenging for families with unstable incomes or those faced with emergency expenses such as illness or death.
Even when families can finance educational outgoings, there are logistical challenges to making such payments. Families in rural areas may have to travel long distances to a bank or the school and wait in line to pay the fees, eating up time they could be making a wage.
On the other hand, the schools are required to pay teacher salaries (with teacher absenteeism often stemming from the logistics involved in teachers picking up their salaries) and the fees of other service providers, collect payments from families, and possibly turn to loans to keep the structure afloat when faced with fluctuating revenue due to delinquent fee payments.
In some instances, the government also gets involved in educational payments by providing state subsidies to reward families whose kids stay in school, such as the famous Bolsa Familia in Brazil (see also our Mondato Insight on G2P payments in Latin America here).
Enter the Parents
Both the digital payment of school or exam fees and the provision of digital books or tools can clearly optimize parental schedules. In addition, mobile money and other digital finance tools can equally assist families in better managing the cost of education by allowing installment plans and providing access to savings, loans and insurance. For example, Econet in Zimbabwe allows families to set a savings goal for school fees, which if not reached, provides access to a loan. M-Shwari in Kenya also provides such loans to parents. Omega Schools in Ghana offer a pay-as-you-go-to-school model, where the daily fee includes tuition, one meal, a uniform and the end of term assessment. In addition, mobile money can also facilitate fundraising for educational purposes from friends/ family via such services as M-Changa.
To the Principal’s Office
The digitization of payments also provides benefits for the schools themselves. For example, in Nigeria the Developing Effective Private Education Nigeria (DEEPEN) has partnered with Stanbic IBTC Bank and the Association for Formidable Educational Development (AFED) to pilot a mobile school payment scheme in low-income schools in Alimosho, the most populous area in Lagos state. From the perspective of a low-income school, revenue collection is facilitated and its financial history is built, allowing the school to access longer-term finance in the impending future.
Cote d’Ivoire provides an encouraging case study on the benefits of digital payments. During the 2015-2016 school year, 99.3% of Côte d’Ivoire’s 1.7 million secondary school students paid their annual school registration fee via mobile money, allowing the schools to collect all fees on time and function properly, and thereby also preventing theft.
When there is a central administration for a group of schools, the benefits can be even greater. Bridge Headquarters handles all payments for its 438 Bridge International Academies in Kenya, Uganda and Nigeria, and therefore the individual schools do not need specific staff to handle payments or accounting. Further, intermittent access to (or lack of) electricity does not negatively impact the financial running of the schools.
Lastly, digitization can go beyond payments and facilitate the monitoring of a school's performance, and link this monitoring with teacher’s pay, as is the case with CU@School Project in Uganda, which keeps tabs on teacher and student attendance in the context of performance-tied teacher salary.
Beyond the Classroom
The potential positive impact of the digitization of payments on students, parents, teachers, schools and government is significant, as are the prospective large volumes of payments, which could benefit mobile money providers. Furthermore, reliable payment options become even more relevant when users want to access education digitally, beyond the classroom.
In Asia, E-Learning is growing at a fast pace and countries such as Myanmar, Malaysia and Thailand are experiencing around 50% annual growth rates. Game-based learning is also gaining traction. In Thailand, for example, Sanook.com, Thailand's leading online entertainment portal works with SkillLane, an online learning platform for professionals which offers 150 online courses. PLDT Enterprise in the Philippines launched SMART’s new eLearning Program for academics and training institutions this October. Although the main tenets of the program prioritize a suite of products that leverage the benefits of internet-based technologies in schools, the solution also offers vehicle and personnel trackers for school transport as well as for student use.
In Africa, Sterio.me, a recent finalist of Mondato Summit Africa’s Social Impact Award, engages learners via mobile to reinforce in-classroom learning with pre-recorded interactive lessons delivered via an SMS-triggered inbound voice call to the learner. Cape Town based Rethink Education is a platform that pushes content to instant messaging platforms, such as Mxit, WeChat and Bambisa, while the web platform is used in schools. Ubongo in Uganda aims to simplify the teaching of mathematics to children through fun video stories in Swahili and SMS. Obami is a social learning network providing e-learning solutions to schools, individuals and organizations.
In Latin America, the Brazilian EduK offers online courses that are broadcast live in a freemium model; with more than 2 million students enrolled in its 600 courses, it is looking to expand to the rest of South America. Descomplica, another Brazilian company that offers online classrooms, is one of the most successful stories of the Latin American EdTech startups. TareasPlus in Colombia has the largest catalogue of Spanish-speaking instructors and more than 1,000 courses, 45,000 lessons and 700,000 registered students, which makes it by far the largest course marketplace in Spanish.
Emerging EdTech companies have different business models, which impact the payment options. Some programs are provided by the school or employer, or funded by a donor agency, and thus are free for users, while the freemium model is common for programs focused on higher education and skill acquisition. Currently cards and local payment types (Boleto Bancario or cash at merchant network) are the most popular ways to pay for these services.
The Next Generation
EdTech in emerging markets is mainly focused outside of the classroom. Large swathes of people - from toddlers to post graduate students - can access educational content and online courses for the first time. Other services assist pupils in performing better inside the classroom, by reinforcing in-classroom learning. Innovative financial services are equally allowing a growing number of students to attend well-functioning schools with hard working teachers. Most of these services, which are relatively new, are a result of increasing access to internet, mobile phones and technology.
However, this is just the tip of the iceberg for education. As ICT technology further evolves, whether that be through faster internet delivered via 5G or smart devices/ software powered by the Internet of Things and Artificial Intelligence, services that are unimaginable now will become common place. In relation to the educational sphere, that may translate as a substantive amelioration of literacy across all social classes. While free education remains the ideal for many political dissidents and agitators (like the Sanders crowd), digitization will prove a handy compromise in delivering more effective, more affordable, and more attainable education to the masses.
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Image courtesy of Nathan Laurell.