What does payday look like when the closest bank is miles away and it may take several hours to complete the round trip?
This is a reality for educators called “Learning Facilitators” across rural Northern Nigeria where the lack of formal banking institutions makes it hard to access financial services and get paid for their work. It’s a challenge facing an innovative education project in two Nigerian states.
As part of the USAID-funded Northern Education Initiative Plus, Creative Associates International and its partners are strengthening the ability of Bauchi and Sokoto states to provide greater access to basic education — especially for those affected by conflict — and to improve reading outcomes for school-aged children and youth.
Through its non-formal learning centers, NEI Plus provides learning opportunities to children and youth who are not able to attend the formal school system. They are taught by Learning Facilitators, 87 percent of whom live in rural areas. To support them, the project pays Learning Facilitators a stipend of 10,000 Naira per month (approximately $27).
To ensure payments make it to these financially underserved educators facing this access gap of traditional banking channels, Creative sought to find a local financial technology solution that leveraged the mobile phone. Mobile phone ownership in Nigeria is relatively high (83 percent according to the World Bank), giving NEI Plus the option to build upon the already established mobile money channels. The NEI Plus collaborated with the company eTranzact to provide a customized, tailored payment solution.
As they were financially underserved, the majority of Learning Facilitators had never used mobile money before. To ensure sufficient uptake of the product for the project use case and beyond, the NEI Plus designed and deployed a mobile money training for the educators. The training included sections relevant to their uses: digital financial literacy, mobile money uses, mobile savings, and mobile value-added services.
The reviews from the Learning Facilitators have been positive.
During recent interviews with them, we learned that they enjoy receiving their stipends via mobile money. One facilitator noted that he liked having his stipend immediately available on his phone so that he could choose what to do with it, another noted that he liked the security provided via mobile money.
Regional breakthrough with mobile money
The mobile money deployment was also new for this region of Nigeria. For example, the mobile money infrastructure (mobile money agents, etc.) that was rolled out to support our disbursements was the first to be deployed to both Bauchi and Sokoto states – an important first step for further financial inclusion.
The use of mobile money by the Initiative comes at a critical time in the development of financial inclusion in Nigeria. The Government of Nigeria, via the Central Bank of Nigeria, is supporting mobile money operators to expand throughout the country, but predominantly in the northern areas. Through their involvement in this Initiative, eTranzact is now well-positioned to future work with the Central Bank.
Specifically, the Central Bank of Nigeria has rolled out a Shared Agent Network Expansion Facility that aims to onboard 40 million low-income, under- and unserved Nigerians into the formal financial system, including increasing financial access points (mobile money agents, ATMs, etc.) from the current 50,000 to 500,000. eTranzact was certified by the Central Bank as one of 10 mobile money operators and super agents to rollout additional agent locations within the next 24 months.
Utilizing local mobile money solutions for payment to the Learning Facilitators was a win-win for the project and eTranzact. eTranzact’s mobile money product provided a safe, efficient, and convenient stipend disbursement mechanism for the project and the Learning Facilitators.
Through their involvement, eTranzact were able to roll-out their products in new geographies and expand their network. These experiences will serve Creative well as we continue to provide services and deepen financial inclusion among under- and unserved populations in Nigeria.
Paul Newall leads the Financial Technology Focus Area for the Creative Development Lab.