UK mobile communications company Vodafone’s M-Pesa mobile money
transfer service, which has been a success in Kenya, has been
adapted for use in another country where the vast majority of
people have no access to formal banking services – Afghanistan.
Branded M-Paisa, the short message service-based product has been
launched in partnership with the country’s largest mobile phone
service provider, Roshan.
“The launch of M-Paisa in Afghanistan is an important step
forward in Vodafone’s international roll-out of its money transfer
service,” said Vodafone partner markets CEO Hatem Dowidar. He added
that, as Vodafone has always envisaged with its money transfer
services, products for each market are developed according to the
requirements of that country, and the Afghan service will have a
significantly different focus from the Kenyan version.
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Initially, M-Paisa will act mainly as a vehicle for
micro-finance institutions’ loan disbursements and repayments, with
an additional range of business applications such as salary
disbursement and airtime distribution. Person-to-person money
transfers will be available from the outset.
Extending reach
In addition, Roshan and Vodafone are testing 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 Afghanistan’s high illiteracy rates. “Our trialling
of an interactive voice recognition system means that financial
services can be brought to people across the world regardless of
their social circumstances,” said Dowidar.
Afghan bank The First MicroFinanceBank has begun using M-Paisa
to disburse funds and accept loan repayments, while international
micro-finance organisation the Foundation for International
Community Assistance is running trials.
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By GlobalData“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,” said Roshan’s CEO, Karim Khoja. He added that
the challenge of providing timely and reliable payments in a
country requiring major infrastructure development is significant
and that the M-Paisa service will provide “the backbone” of the
country’s money transfer system.
According to Roshan, its mobile service has 1.7 million
subscribers and has a geographical coverage capable of reaching 40
percent of Afghanistan’s population of about 32 million people.
Roshan is a joint venture between international aid organisation
the Aga Khan Fund for Economic Development (its majority
shareholder), Monaco-based mobile communications service provider
Monaco Telecom, and TeliaSonera, a supplier of telecommunications
services in the Nordic and Baltic regions.
Growing customer base
In Kenya, which also has a population of about 32 million, the
M-Pesa service has received solid support. Vodafone announced in
early February that since the launch of M-Pesa in March 2007 in
collaboration with Kenyan mobile phone service provider Safaricom,
1.6 million people have registered as customers and an additional
200,000 customers are being added every month.
Vodafone has a 40 percent stake in Safaricom, the balance being
owned by landline and wireless service provider Telkom Kenya, in
which French communications company France Télécom holds a 51
percent stake acquired in late 2007.
Commenting, Safaricom CEO Michael Joseph said: “M-Pesa is a
service designed to meet the core needs of our customers in an
emerging market. The fact that it has had a strong take-up in such
a short time demonstrates its potential to drive positive
change.”
M-Pesa is used for personal money transfers with an average
value of €30 ($44). Companies also use the service. For example,
Safaricom pays casual workers and has distributed 40,000 cash
prizes to its subscribers using M-Pesa. Certain small businesses,
such as taxi drivers and grocers, also accept M-Pesa as a means of
payment.
M-Pesa facilitates money transfers up to a maximum of KES35,000
($500) while minimum transfers are KES100. Transfers between
registered M-Pesa customers cost KES30 irrespective of the amount
transferred, while tariffs for transfers to non-M-Pesa customers
range from KES75 to KES400.
“During the course of this year we plan to continue to extend of
the uses of the service in Kenya and seek new markets where the
benefits of mobile money transfer can be used to assist people in
sending funds safely and securely,” said Vodafone’s head of
international payments, Nick Hughes. Potential new services include
Safaricom, water and electricity billpay and pension payments.
