MICROCAPITAL BRIEF: Democratic Republic of Congo Fights Corruption by Paying 1m Civil Servants via Mobile Banking

Since Prime Minister Augustin Matata Ponyo vowed in 2012 to replace all cash wage payments in the hopes of minimizing corruption, the Democratic Republic of Congo (DRC) has issued wage payments to 270,000 of 1 million civil servants via mobile banking. The remaining workers are slated to have mobile banking accounts opened for them by June, increasing the percentage of banked people in DRC to 5.7 percent from 2 percent out of the population of 75 million.

Government workers can use their new mobile accounts to pay bills, make deposits, pay for retail purchases and conduct other transactions via text message also known as short message service (SMS). This system is intended to avoid the mishandling of cash and “self-tipping” by superior officers. Once cash wages were passed down the hierarchy, it was reportedly common for civil workers and soldiers to receive the equivalent of USD 5 of their USD 60 monthly wage. The transition from cash to mobile wage payment also uncovered “ghost workers,” fictitious employees added to the payroll so that officials could pocket extra cash. Thirty fake schools “employed” approximately 200 ghost teachers. With the savings from corrupt practices, it is expected that the DRC government will be able to cover the USD 3.50 fee to open each mobile banking account.

By Jennifer Young, Research Associate

Sources and Additional Resources

Africa Review Story: “Mobile Banking Revolutionizing DRC State Wage Payments”
http://www.africareview.com/Business—Finance/Mobile-banking-revolutionising-DR-Congo-state-wage-payments/-/979184/1749170/-/vddgxc/-/index.html

MicroCapital Story: “MICROCAPITAL BRIEF: Anne Hastings of Fonkoze Outlines Framework for National Mobile Money Systems,” March 5, 2013.
http://www.microcapital.org/microcapital-brief-anne-hastings-of-fonkoze-outlines-framework-for-national-mobile-money-systems/

MicroCapital Story: “MICROCAPITAL BRIEF: World Bank Releases Government Electronic Payment Program Guidelines,” August 23, 2012.
http://www.microcapital.org/microcapital-brief-world-bank-releases-government-electronic-payment-program-guidelines/

MicroCapital Story: “MICROFINANCE PAPER WRAP-UP: Global Microscope on the Microfinance Business Environment 2011,” February 9, 2012.
http://www.microcapital.org/microfinance-paper-wrap-up-global-microscope-on-the-microfinance-business-environment-2011/

MicroCapital Story: “MICROCAPITAL BRIEF: Grameen Crédit Agricole Microfinance Foundation Lends $2m to Microfinance Institutions Hekima of Congo; Findev of Azerbaijan; Chamroeun, TPC of Cambodia,” November 21, 2011.
http://www.microcapital.org/microcapital-brief-grameen-credit-agricole-microfinance-foundation-lends-2m-to-microfinance-institutions-hekima-of-congo-findev-of-azerbaijan-chamroeun-tpc-of-cambodia/

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