Mobile Money Transforms Payday from Dangerous to Doable
Liberian Government embraces electronic transfer for civil servant salaries
“We would hear if our salaries arrived in our bank accounts through rumors,” explains James N. Kargoe, a teacher from rural Nimba County, Liberia. “Then, all teachers would leave campus for the bank in Ganta, 30 miles away.”
In Liberia, a 30-mile trip is not easy. When James traveled to pick up his salary, he and the other teachers could be gone for days. “There are some parts that you can only travel with a motorbike,” he explains.
Liberian roads are treacherous and largely unpaved. During the rainy season, they become thick mud paths with cavernous water-filled potholes. They trap even the hardiest vehicles.
When James finally got to the bank he was often told that the “system is down,” a common excuse to avoid serving customers. There was no cash to pay the teachers, and so they might wait for days in Ganta or make the difficult trip back home only to have to go back to Ganta once again.
Between costs for transportation, food and lodging, this arduous journey costs civil servants like James 15 percent of their salary per month. Every month, it takes civil servants 22 hours on average between motorbike, taxi, waiting at the bank and traveling back home to receive their salaries.
During the Ebola crisis from 2014 to 2015, payment systems in Liberia were further weakened. Cash pay teams, which moved money from Monrovia to banks in rural areas, were restricted from traveling. In some cases, civil servants could not be paid. Some health workers, risking their lives to fight the disease, protested the lack of pay by striking.
Due to the efforts of health workers and the international community, Ebola was defeated. But to Liberian officials, one thing remained clear: Liberia was in dire need of a new payment option. So, they took action.
The Government of Liberia partnered with USAID through the mSTAR project (Mobile Solutions Technical Assistance and Research), and concluded that mobile money was a promising option to build an efficient and reliable salary payment system that would allow civil servants to remain at their workplace and avoid dangerous and costly travel.
They brought on two mobile money service provides, first Lonestar, then Orange. Then, starting in 2016, they set up processes to enroll civil servants — initially from the Ministries of Health and Education — in mobile salary payments and held enrollment events across the country.
“When we were invited to the enrollment event,” James said, “we were excited.” Many teachers had already heard of the system through their colleagues, and they knew it worked.
“I have been on the mobile money option for six months now,” he added. “I am very happy.”
He now gets a text message when his salary arrives and a mobile money agent is located at the junction near his house, so he can cash it out on his way home from work. On average, civil servants save 979 Liberian Dollars per month with mobile salary payments and are able to spend 12 more hours at work per month.
That is especially important to James, who teaches reading and writing to students age 6 all the way to 25. Missing work had real consequences for his students.
When teachers are traveling to retrieve their salaries, the children lose out on valuable lessons, and run around unsupervised on campus. “One student ran into the street near campus and was hit by a motorbike,” James recalled. The child had to be taken to the hospital.
In addition, his home district of Saclepea in Nimba County was a major recruiting ground for child soldiers during the civil wars that devastated Liberia for more than a decade and a half. By their end in 2003, many of his students missed out on basic education. James’s reading classes are critical not only for teaching children how to read, but also to help young adults whose educations were stymied by the war.
Since the mobile salary program began in 2015, nearly 5,000 education and health staff have enrolled across all 15 counties of Liberia. mSTAR’s partnership with the government ended in April 2018, but the government has plans to continue the program.
If all 21,000 health and education staff switched to mobile money, the Government of Liberia could save $4 million, according to mSTAR’s estimate. That’s less travel for cash pay teams, less paper for checks used and less money spent all around.
“The Government of Liberia is committed to expanding mobile money activities not only to health and education workers, but also to other ministries,” Comptroller Accountant General Janga Kowo said at the mStar close out event.
Due to the partnership’s success, the Government of Liberia plans to take the program forward, building on it and investing in its success. And of course, Liberians can now feel more confident that civil servants at the frontlines caring for them — their education and health workers — will be ready at their posts.
About the Authors
Olu Olutola is the Senior ICT Advisor at USAID based in Liberia. Clarissa Perkins is the Communications Specialist at the implementing partner, FHI 360.
