This document discusses using mobile networks to expand financial access in Afghanistan. It notes that less than 5% of Afghans have bank accounts but over 13 million use mobile phones, with coverage reaching 85% of the population. It proposes a mobile money platform that would allow Afghans to store and transfer funds electronically using their phones. This could help deliver salaries, loans, and other payments in a traceable way across the country. The document outlines several pilot projects that aim to leverage mobile money through partnerships between mobile network operators, government agencies, and NGOs to provide financial services to over 100,000 Afghans in 2012.

1. Mobile Money in Afghanistan
Building on Success:
Leveraging the Mobile Network
to Transform Afghanistan’s Financial Sector
January 24, 2012

2. Leveraging the Mobile Network
The areas shaded red are the
population covered by the
existing mobile network.
The circles represent the main
concentrations of the
approximately 266 brick-and-
mortar bank outlets, which are
limited almost exclusively to
urban areas.
Using the Mobile Network to Bridge the Infrastructure, Security and Illiteracy Gaps
• Less than 5% of Afghans have bank accounts. This number is not projected to grow significantly.
• 55% of Afghans (over 13 million) use mobile phones. This number is projected to rise to 70% by 2014
(Transition).
• 85% of Afghans already live in areas covered by the four mobile telephone companies.
• Government salaries could be delivered on time and in full, improving governance by instilling transparency.
• Interactive Voice Response technology allows mobile banking to bridge the illiteracy gap. 2
• A nationwide mobile banking platform would provide a traceable alternative to cash payments.

3. How does mobile money work?
Mobile Money Service Provider Bank
Agent bank account Accounts (Pooled funds from all clients
linked to Mobile in at least four banks to diversify risk)
Bank
-
Money Service
Provider for cash and Agent account debited
commission transfer 4
+ Client account credited
Client opens mobile
1
money account via agent
Electronic value sent
Agent
Client
2 to client’s mobile
wallet (salary, family)
Cash out from agent
3 to client
3

4. Building Momentum in 2011
• On March 29 in Kabul, over 150 delegates attend the
mMoney Stakeholder Summit.
• Association of Mobile Money Operators of Afghanistan
formed.
• On April 25, Afghan Central Bank issues first
Electronic Money Institution License to Roshan’s M-
Paisa service
• On August 24 in Kabul, Administrator Shah and the
Minister of Education and Minister of Communications
and IT highlight importance of mobile money.
• Etisalat and MTN launch mobile money services in
November 2011 followed by AWCC in 2012.
• USAID’s Financial Access for Investing in the
Development of Afghanistan (FAIDA) program:
– Providing technical assistance to government agencies
and mobile network operators;
– Supported eight person Afghan Government delegation to
the GSM Assoc. Mobile Money Summit in Singapore at
the end of June; 4
– Managing $5 million Mobile Money Innovation Grant

5. Aiming for over 100,000 Active Users in 2012
PARTNER ORGANIZATION MNO MOBILE MONEY APPLICATIONS USAID GRANT COVERAGE EXPECTED RESULTS
Mutahid Microfinance
1 Roshan Loan Payments and Disbursements $362,000 Grant approved 5 Provinces 15,000 borrowers
Institution
Da Afghanistan Breshna Sherkat
2 Etisalat Electricity bill payments $717,000 Grant approved Kandahar 50,000 utility customers
- Electricity Utility
3 Ministry of Education MTN-A Teachers’ salary payments $957,000 Grant approved 10 Provinces 20,000 school teachers
Association of Mobile Money University Contest for Students
4 ALL $ 80,000 Grant approved 18 Provinces 8 Top Applications
Operators of Afghanistan (Freshman-Senior)
Agricultural Development Fund
5 Roshan Farmers’ loan repayments Not Required 3 Provinces 500 Farmers
(USAID-funded)
PROJECTS IN PIPELINE
Farm Service Center Alliance
6 MTN-A Farmers’ loan repayments $250,000 estimated Grant 4 Provinces 10,000 Farmers
(USAID-funded)
Women’s Garden business
7 Ministry of Women’s Affairs Etisalat $500,000 estimated Grant 4 Provinces 20,000 Women
opportunities
Afghan Payment System Banks and Interoperability of Banks &
8 ALL National Payment Switch $650,000 estimated Grant
(with World Bank funding) MNOs MNOs
9 Afghan Public Protection Force TBD APPF Salary payments $500,000 estimated Grant TBD 10,000 Personnel and Families
World Food Program
10 Roshan Distribution of Food Vouchers $400,000 estimated Grant 4 Provinces 50,000 Families
(partially USAID-funded)
Effective management of
11 Capacity Building Team ALL Seconded Project Managers to MNOs $400,000 estimated Grant National
mobile money projects
12 Integrated Agent Network ALL Single Agent Network for all MNOs $250,000 estimated Grant National Effective agent deployment
IDLG/District Delivery Program
13 ALL Payment of top-ups Not Required 45 Districts 3,500 GIRoA Officials
(USAID-funded)
5
Afghan Civilian Assistance Kinetic
14 ALL Civilian Casualties Payments Not Required 1,000 families
Program II (USAID-funded) Provinces