Benoit Destouches Financial Analyst Increasing access to finance using mobile banking services What are the factors MFIs should consider before engaging in m-banking solutions? Case Study on M-Paisa in Afghanistan

Mission  To reduce poverty, diminish the vulnerability of poor populations and alleviate economic and social exclusion. It aims to help people become self-reliant and eventually gain the skills needed to graduate into the mainstream financial markets. Key Indicators  1st banking license (2003)  33 branches / 850 staff  40,500 borrowers / USD 52M portfolio  46,000 depositors / USD 90M deposit The First MicroFinanceBank Afghanistan Shareholding Structure

Why Mobile Banking? Poor transport infrastructure Popularity of mobile phones Large unbanked population Security M-Paisa

Model: MNO-Based Roshan is Afghanistan’s leading telecom operator. M-Paisa developed in partnership with Vodafone. Piloted in 2007, launched in “Hawala on Your Mobile”

Pilot Phase Pilot Agreement signed in February Limited scope: Kabul and Mazar Test of:  Registration  Loan disbursements  Loan repayments …but also of:  IT systems  Processes and procedures  Agents

Holding Account Holding Account Mobile Micro Finance Account Mobile Micro Finance Account FMFB Client Commission Account Commission Account Registration Process Internal Transfer Loan Disburse Loan Disburse Loan Repay Loan Repay Sell M-Paisa Sell M-Paisa Buy M-Paisa Buy M-Paisa Roshan Bank Account M-Paisa Accounts Structure

Pilot Review Is M-Paisa a useful service in general? Is M-Paisa an easy to use service? Will you continue to use M-Paisa?

Results so far Mixed results Additional survey of agents:  76% trust saving through an electronic system.  Willingness to accept new technologies.  69% would not feel comfortable saving with their shopkeeper.  Lack of trust with players outside formal financial institutions. Progress Report

Lessons Learned – Understand the Market From… …To

Lessons Learned – Know Your Partner

Lessons Learned – Manage the Agent Network From… …To

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