Mobile money
Mobile money is not just about financial inclusion. It is not just a lever of opportunity for the poor. It can also serve as the lynchpin in government efforts to improve transparency, mitigate corruption, reduce leakages in the disbursement of funds, and undercut serious threats to our security. In Afghanistan, it’s serving both these purposes.
The U.S. Military’s pilot to pay Afghan National Police through mobile phone transfers demonstrated that government salaries can be on time and in full, improve governance and reduce the number of hands touching the salaries along the way. Today, over 500 Afghan National Police receive salaries and 800 District Counselors get stipends via Roshan’s M-Paisa service. Receiving there salary through mobile phones prompted a number of employees to think they had received a nearly 30 percent raise. Instead, they were paid what they were supposed to be paid for the first time.
At the same time, USAID is working with policy makers to create a safe regulatory environment for the poor to access mobile money. In particular, USAID support to Afghanistan’s Central Bank, Da Afghanistan Bank (DAB), resulted in the Electronic Money Institution (EMI) regulation and on April 25, 2011, DAB issued the first EMI License to Roshan’s M-Paisa service. USAID has also been working closely with DAB to eliminate agent fees and institute a tiered Know Your Customer requirement to enable a safe and robust financial services sector.
Through a $5 million Mobile Money Innovation Grant Fund managed by the Financial Access for Investing in the Development of Afghanistan (FAIDA) program, USAID is intends to increase the number of clients and agents, reduce opportunities for corruption and serve as a catalyst for economic development. Specifically, we hope to provide more of the 400,000 Afghan civil servants and security personnel salaries currently being paid in cash onto the mobile phone, facilitate bill payment for the 750,000 electricity customers, and encourage USAID implementing partners to use mobile money.
If successful, this project will go a long way to instilling trust and transparency in public sector institutions by ensuring that citizens receive the salaries they earned.
