- What We Do
- Agriculture and Food Security
- Democracy, Human Rights and Governance
- Economic Growth and Trade
- Ending Extreme Poverty
- Environment and Global Climate Change
- Gender Equality and Women's Empowerment
- Global Health
- Water and Sanitation
- Working in Crises and Conflict
- U.S. Global Development Lab
- Cornerstone Partners
- Partner With The Lab
- Lab Vacancy Announcements
- Development Innovation Ventures
- Data & Analytics for Development
- Digital Development
- Global Development Alliances
- Grand Challenges for Development
- Higher Education Solutions Network (HESN)
- International Research & Science Programs
- Leveraging Universities
- Makers For Development
- Pioneers Prize
- Research and Innovation Fellowships
- Science at USAID
$96,409 | Stage 1: Proof of Concept | Economic Growth & Trade
The problem: Making remittances count
Every payday, migrants around the world take a sum of money from their paycheck and set it aside to send to their relatives and friends back home. These monies—called remittances—are one of the largest international financial flows to developing countries. Worldwide, remittances totaled $406 billion in 2012 alone.
In the last few years, there have been significant efforts to make it cheaper and easier for people to send remittances. Remittances are often sent to support the school fees of relatives back home, but it remains difficult for the sender to ensure that the money is spent as intended. Because it is difficult to designate remittances for activities that promote economic growth like education, the development potential of remittances remains constrained.
The solution: Channeling support for smarter spending
Enter researchers from the University of Michigan, who developed a money transfer platform called EduPay. EduPay provides migrants with the ability to pay educational institutions in their countries of origin directly, without channeling the funds through a relative or other "trustee." The system also provides information to the remittance sender on the performance—report cards and attendance records—of the sponsored student. Through this double monitoring capability, EduPay enables the remitter to both monitor that his or her money is being spent as intended and that the funds are actually making a difference.
With Stage 1 DIV funding, researchers are piloting EduPay and assess its impacts and profitability. To bring in the skills and knowledge necessary to make EduPay successful and sustainable, University of Michigan researchers have also partnered with the Bank of the Philippine Islands (BPI) and a respected Philippine NGO with expertise in managing educational scholarships.
The potential: Cost-effectiveness, impact, and implications
If EduPay proves successful, it is expected that the Filipino bank and others will have the incentive to scale the product dramatically. Additionally, this education- and country-specific platform has wide implications across countries and sectors. Countries throughout the developing world could use the EduPay model to create similar systems for remittances designated for health care, home building and care for elderly relatives.
Read the latest progress report on the EduPay project.
Last updated: October 15, 2013