This one small change could transform education for millions

classroom 2019
Children in class at Namu Keeling, Indonesia (Unsplash, 2019)

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Manos Antoninis, Director, Global Education Monitoring report, UNESCO & Breon Corcoran, CEO, WorldRemit


On paper, Ally starts his school year in Tanzania in January. However, his aunt Susan, an engineer living in Sweden, has been preparing for this day for months, working hard to send money home to pay his school fees. For many school-age children like Ally living in Africa, Asia and Latin America, the journey to the classroom doesn’t begin when the sun rises. It starts with the efforts of family and friends, from Australia to Austria and the UK to the US, sending home nearly $528 billion to developing countries in 2018 in Tanzania – a figure more than triple official development aid.

With 220 million children out of school in low- and middle-income countries, it is vital that governments and businesses come together to tackle the first and last mile in the remittance journey, to ensure even more children complete their education. This matters because, as we learned in the most recent edition of UNESCO’s Global Education Monitoring Report, out of all spending on education, one in four dollars in middle-income countries and one in three dollars in low-income countries comes from families, not governments. To put it into context, the report found that lowering remittance costs to 3% from the current average of 7% would allow households to spend an additional $1 billion on education per year. Families can also make their funds go further by switching to low-cost digital transfers – WorldRemit estimates that this could unlock $825m for education in developing countries.

Improving the first mile

So how can we do things better? Digital disruption is shaking up the industry, but sending remittances is all too often a slow, costly and opaque experience.

For starters, the financial literacy of migrants needs to be improved. While newly arrived families in host countries often find the education of their children is catered for, the education of adults is frequently overlooked, despite the importance it carries for their household decisions, including how to best navigate new welfare systems and avenues for remittances.

Companies catering for migrants must also offer products that meet their needs. The shift towards digital, for example, saves on time as well as cost. If you work as a taxi driver, nurse or care assistant, you can send from your smartphone instead of having the inconvenience and expense of taking time out of work to find a bureau to send cash.

Technology also empowers customers with more information about their transfers. Regular updates on foreign exchange rates and transparency on fees help the customer to make more informed choices. Equally important is knowing the speed of transfer and confirmation that funds have arrived. Experience shows that remittance senders are often responding to last-minute requests – e.g. a child’s school fees and equipment – that must be paid in a day not a month.

Digitizing the last mile

The GEM Report shows that remittances increased education spending by over 35% in 18 countries in Africa and Asia and by over 50% in Latin America. Complementary research by WorldRemit finds that remittances kept 3.5 million children in school worldwide in 2018.

For the hardest to reach groups, like girls and rural communities, technology is also making a difference in the form of mobile money accounts. Take lawyer Joy Kyakwita, for example: her education was supported by her sister living in Europe, who put her through school and university back home in Uganda. At that time, to receive the funds, Joy had to travel into town to a bureau or to wait for the cash to arrive with someone travelling home. Now working in the UK, she has supported nine children in Uganda. But instead of the cumbersome and risky options she faced, Joy sends mobile money transfers to the children or pays fees directly to their schools’ mobile money accounts. Technology has eliminated the last mile of the remittance journey, which allows these children to focus on their education.

This trend is set to continue. The mobile telecoms industry body GSMA records that mobile money accounts have doubled in 2017, and more than half of Sub-Saharan Africa is projected to be connected by 2025. However, for this potential to be fully realized, governments in remittance-receiving countries must be careful about how they tackle the taxation of mobile money services, cognizant of the wider effects on families. As an example, Uganda’s newly introduced excise duty of 0.5% on mobile money transactions translates into two years’ worth of school books, based on an average year of school fees sent via mobile money.

The cost of expensive remittances

In some ways, we are just at the beginning of this transformation. Remittances are projected to have grown globally by 10.3% to a record $689 billion in 2018. But transaction costs for many remain far too high, and the vast majority of remittances are still offline. The money that migrants send home is vital to the education of millions of children. But to enable more children to benefit, businesses and governments must leverage the benefits of technology to make the journey of remittances from senders to recipients simpler and faster.

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

the European Sting Milestones

Featured Stings

Stopping antimicrobial resistance would cost just USD 2 per person a year

Germany’s strong anti-bribery enforcement against individuals needs to be matched by comparably strong enforcement against companies

Pesticides: MEPs propose blueprint to improve EU approval procedure

‘Continue working together’ UN chief urges DR Congo, as country heads to polls

MWC 2016 LIVE: Verizon boasts momentum for IoT platform

How will EU look after French, Dutch and German Elections and what will be the implications for Youth Entrepreneurship?

Elections in Britain may reserve a surprise for May’s Tories

At last Germany to negotiate the costs for a really cohesive Eurozone

Why the Greeks forgave Tsipras’ pirouettes around austerity and voted again for SYRIZA

Cryptocurrency mining could become the new face of energy storage. Here’s how

NEC @ MWC14: “Smart cities” hold the key to enhancing citizens’ lives and cutting costs

The developing countries keep the world going

EU: Divided they stand on immigration and Trump hurricanes

“We always honor our words, and in that respect we expect our partners to honor their words as well”, China’s State Councillor and Foreign Minister Wang Yi highlights live from Brussels

Armed insurgency in north-east Nigeria ‘has created a humanitarian tragedy’

EU Parliament: Deposit guarantee and trading platform transparency sought

This AI outperformed 20 corporate lawyers at legal work

G20 starts to tackle inequality

Batteries included: how better storage can transform renewable energy

Accountability for atrocities in Myanmar ‘cannot be expected’ within its borders – UN investigator

Conflicting statistics and bad banks haunt the Eurozone

Harnessing the power of nature in the fight against climate change

Economic recovery won’t tackle youth unemployment problem

MEPs back plans to boost joint assessment of medicines

Mali: Presidential elections critical to consolidate democracy, says UN peacekeeping chief

Brexit: Is there anybody supporting a non-violent separation?

Trump to subject the Fed, challenge the ECB and make Wall St. bankers even richer

Trump and Brexit: After the social whys the political whereto

Mali not fulfilling its ‘sovereign role’ in protecting its people: UN human rights expert

Increasingly under attack, women human rights defenders need better back up

New phenomena in the EU labour market

Assembly of European Regions @ European Business Summit 2014: The European regions on the path to recovery

Some Prevailing Arguments and Perceptions over the South China Sea Issue Are Simply Wrong

Digital business is Europe’s best hope to get back to growth

The Tears of lovely Memories

A new arrangement between Eurozone’s haves and have-nots

Eurozone’s north-south growth gap to become structural

EU Emissions Trading System does not hurt firms’ profitability

The increasing drug prices in Europe

Security Council downsizes AU-UN mission in Darfur, eying eventual exit

Biggest London City Banks ready to move core European operations to Frankfurt or Dublin?

How the EU crisis hit countries saved the German and French mega-banks from bankruptcy and still pay the costs

‘Global sisterhood’ tells perpetrators ‘time is up’ for pandemic of violence

May a parody constitute a copyright infringement? European Court of Justice to give the answer

Everything you need to know about water

Let the Italians have it their way, it may be good for all Eurozone

MEPs commend Ukraine‘s reform efforts and denounce Russian aggression

Korea must enhance detection and reinforce sanctions to boost foreign bribery enforcement

UN rights chief calls for release of hundreds abducted and abused in South Sudan

Ercom, cutting-edge Telco solutions from Europe

What do the economic woes of Turkey, Argentina and Indonesia have in common?

EU to negotiate an FTA with Japan

Governments and non-state actors need to take urgent action to meet Paris Agreement goals

An ECB banker wants to change the European social model

Commission tries to solidify the EU statistical system

Could robot leaders do better than our current politicians?

Every bite of burger boosts harmful greenhouse gases: UN Environment Agency

Russia and the West to partition Ukraine?

A Sting Exclusive: “Junior Enterprises themselves carry out projects focusing on the environment”, JADE President Daniela Runchi highlights from Brussels

A machine din

EU prepares a banking union amidst financial ruins

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s