The followingis a series of guest blogs from theConsultative Group to Assist the Poor(CGAP).
Digital Finance Plus is the use of mobile money and branchless banking to make basic, essential services and utilities – in energy, health, education, and water, for example – more accessible to people at the base of the economic pyramid. Here finance is not an end itself but a means to help solve significant development challenges in order to improve the lives of the poor. Through a series of video interviews and an animation, this blog series introduces the concept of Digital Finance Plus and highlights some of the innovative companies and individuals working in this space.
We recently spoke withTonee Ndungu of Kytabu via Google Hangout. Kytabu is a Kenyan-based company that offers a subscription service to core-curriculum text books. With this model, people can pay in small increments for only the content they need - likely just a few individual chapters of a book - via mobile money and read the content on their cell phones.
Kytabu is a new business that has a long way to go but Tonee’s concept has stood out to us as an example of what is possible with education for the poor in the digital world. As Tonee explains: “Not only will poor people pay for textbooks, they are doing it right now…Instead of buying the whole book, they go to middle men who buy the original textbook…photocopy the entire textbook and then sell it in chapters and when they sell it in chapters, it is cheaper than buying the entire book…A lot of parents are buying those because that is what they can afford...So it is already happening and all that Kytabu is doing is… digitizing it.”
We learned about Kytabu through Pivot East, a great competition for start-ups in East Africa. Our view is that education enabled with digital finance is a “white space” that is ripe for innovation. To begin with, there are few known financial products specific to increasing education access for the poor. But interesting innovations could emerge, especially at the intersection of content delivery (MOOCS, Khan Academy, self-directed learning) and financial innovation that makes that educational content affordable for the very poor.