Mobile phone money transfer has been an undoubted smash in Kenya for Safaricom. Vodacom here in neighbouring Tanzania hasn’t been so successful with M-Pesa. Likely problems: poor marketing; limited network of agents; some stiff competition; and a complicated app. Read more here.
One way to get around the competition and poor marketing might be a strategic partnership…. using M-Pesa to pay civil servant salaries. Everyone’s a winner, right? Well not quite. No agent network means you can’t access your salary. And salary fraud may in fact be easier to implement. It’s principal-agent theory: adding more links to the chain between the treasury and the civil servant – poorly regulated ones at that – will likely make abuse of the system easier.
So tell me, in whose interests would such an arrangement be? Vodacom’s interest is obvious. The civil servants’ interest is more ambiguous. What about government or individuals within government? What interest might they have in such a scheme?
Would sitting allowances be paid this way too? What do you think, “Gloria“?