Increasing Access and Opportunity in Remote Areas: Afghanistan

This paper discusses M-Paisa, a mobile banking service that was launched in Afghanistan in February 2008 by Roshan, Afghanistan’s leading telecommunications operator, in partnership with Vodafone.

M-Paisa is an innovative mobile banking solution targeted at the majority of Afghans who do not have bank accounts or a means to transfer funds. The service enables registered customers to transfer funds using their mobile phones in a quick, easy, safe and cost effective manner. M-Paisa can be used for peer to peer transfer, microfinance loan repayment, salary disbursement and airtime purchase. M-Paisa makes it easier for:

• MFIs to expand cost-effectively in both rural and urban areas;
• Entrepreneurs to pay back loans without having to travel vast distances.

Although M-Paisa faces challenges in the areas of tax-related regulation, capacity and security, Roshan aims to expand its service nationwide to provide all Afghans with access to banking services. Finally, the paper states that M-Paisa has the potential to fuel the country’s economic development at multiple levels, boosting economic growth and eliminating common financial barriers.