Vodafone Launches MMT Service in Afghanistan

Vodafone and Afghan operator Roshan have launched Afghanistan's first mobile money transfer system (MMT). The service, branded M-Paisa, is a mobile technology platform that provides financial services for those without access to banking and aims to facilitate economic activity in the region.

The M-Paisa system builds on Vodafone's highly successful M-PESA mobile money transfer service in Kenya which has seen 1.6m people register as customers since its launch in March 2007 (MPW 87, 88). At launch the Afghan service will, however, have a significantly different focus from the Kenyan version.

“The benefits of mobile money transfer are particularly relevant in a developing market such as Afghanistan, where the large majority of the population does not have access to traditional banking services,” says Karim Khoja, CEO, Roshan. “The challenge of providing timely and reliable payments in a country requiring major infrastructure development is significant. M-Paisa, with Roshan's mobile network, will provide the backbone to enable such funds to be transferred reliably which will provide an important vehicle for economic regeneration.”

Initially M-Paisa will act mainly as a vehicle for microfinance institutions' (MFI) loan disbursements and repayments, with an additional range of business to business applications such as salary disbursement and airtime distribution. Consumer person-to-person transactions will also be available from the outset, enabling those MFI clients and employees who have received their money via M-Paisa to benefit from the full capabilities of the service.

Roshan and Vodafone are trailing interactive voice recognition services which, when launched later in the year, will enable greater use of M-Paisa by consumers who might otherwise be excluded due to high illiteracy rates in Afghanistan.

Roshan's retail outlets will serve as transaction points for the withdrawal or paying in of money, thus reducing any dependence on financial institutions. Currently, there are 50 M-Paisa-trained dealers in the cities of Kabul, Mazar, Jalalabad and Herat; Roshan is looking to expand agent reach nationwide by the end of 2008.

“The launch of M-Paisa is consistent with Roshan's vision of promoting social and economic development within Afghanistan, a key focus of Roshan's majority shareholder, the Aga Khan Fund for Economic Development (AKFED), an international development agency dedicated to promoting entrepreneurship and building economically sound enterprises in the developing world,” concludes Khoja.

In addition, M-Paisa will be used by major organisations such as Afghanistan's The First MicroFinanceBank and FINCA - one of the world's largest microfinance institutions. The First MicroFinanceBank has successfully used the service to disburse funds and accept loan repayments while FINCA is currently trailing the product. Other institutions within Afghanistan will soon use M-Paisa to disburse salaries to their unbanked employees.

“The launch of M-Paisa in Afghanistan is an important step forward in Vodafone's international rollout of its money transfer service and we welcome Roshan to Vodafone's international community of Partner Markets,” comments Hatem Dowidar, CEO, Vodafone Partner Markets.

“We have always envisaged that our mobile money transfer would develop differently in each new market according to the requirements of that country. Vodafone is therefore particularly pleased that, alongside the launch with Roshan and a range of microfinance institutions and companies, our trailing of an interactive voice recognition system means that financial services can be brought to people across the world regardless of their social circumstances.”