Archive for: Afghanistan
This is a guest blog by Loretta Michaels, an independent consultant who has worked on mobile money implementations in Afghanistan and Haiti, among other places.
 A mobile money user in Afghanistan As everyone who reads this blog knows, there’s been a great deal of excitement over the last few years regarding the potential for mobile money to solve a host of development problems. And as we’ve all learned over that same period of time, it’s not as easy as it looks, or at least as easy as Kenya made it look. Countries like Afghanistan, Iraq, Haiti, the Democratic Republic of the Congo, even the newly minted South Sudan are all experimenting with or thinking about mobile money implementations. In addition to the normal issues and challenges facing policymakers and service providers, post-conflict and post-disaster countries face additional problems that merely serve to exacerbate the overall challenges with mobile money.
- Skilled resources are scarce commodities in a post-conflict region. Finding experienced staff that can implement and/or regulate mobile money services is hard enough in most places, but finding those people and convincing them to go live and work in high-risk locations is proving almost impossible for service providers, governments and donors alike. Recruitment and hiring can take many months, and even when good people are found, at high cost, many leave early, deeming the stress, danger and distance from family not worth the price. What usually results is a procession of short-term consultants (like me) coming in to dispense advice but not sticking around to help get it implemented, meaning things take twice as long to do and often achieve half as much.
- Introducing innovative mobile financial services in a country that is struggling to form a stable government can embroil a new market in larger coordination problems, especially when private enterprise and government services are both involved. Mobile money is a new area of regulation and may require coordination between different parts of government, which can be hard in markets where governments are newly formed or struggling to manage disaster recovery. In the absence of clear direction, you could end up with situations where regulators act hastily and unilaterally, which may lead to turf battles with other ministries. For example, in a couple of markets, the telecommunications ministry has demanded – and charged a fee for – a “letter of no objection” for a mobile operator to offer mobile money services. In others, the regulator will ask for a specific identification document for account opening when another part of the government is still struggling to even implement such identification. Haiti is a good example of this where many people either never had particular identification documents or they lost them in last year’s earthquake. Read the rest of this page »
 What does mobile money cost for the unbanked and underbanked? CGAP releases pricing study across 16 providers in 10 countries
The conclusion: mobile banking and other forms of branchless banking are cheaper than traditional banking, but the gap between the two may not be as wide as some may think.
On average, branchless banking is 19% cheaper than banks. Why isn’t the pricing gap wider? Mobile money providers might be keeping profits for themselves and not passing them on in lower costs. There could be a good reason.
It is possible that establishing a successful, scaled branchless banking service could be more expensive than expected. Some branchless banking providers want to leave room to come down on prices as more competitors enter the market.
Other highlights:
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The lower the transaction value, the cheaper branchless banking is in comparison with banks. For example, at a transactional value of $23, branchless banking is on average 38% cheaper than commercial banks the study looked at.
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Branchless banking is 54% cheaper than informal options for money transfer.
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Customer usage is influenced not only by absolute prices but by the way a service is priced. For example, in order to encourage trial of money transfers, some services offer free deposits, which make branchless banking an affordable way to save.
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Average branchless banking price is $3.90 per month.
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Informal providers charge double the price for a money transfer than a branchless banking provider.
Services analyzed:
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Afghanistan: M‐Paisa
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Brazil: Bradesco and Caixa
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Cambodia: WING Money
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Cote d’Ivoire: MTN Mobile Money, Orange Money
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India: Eko
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Kenya: M‐PESA and Zap
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Pakistan: easypaisa
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Philippines: GCash and Smart Money
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Tanzania: M‐PESA, Zap
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South Africa: MTN Mobile Money, WIZZIT
The study found that by comparing 26 branchless banking pioneers and traditional banks with products aimed at the same kind of customers, on average, branchless banking is 19% cheaper across eight use cases:
1. Sending Money Transfer
2. Receiving Money Transfer
3. Short‐term safekeeping
4. Medium‐term saving for asset
5. Bill Payments
6. High Usage (as a proxy for financial inclusion)
7. Average monthly transactions per M‐PESA user in 2008
8. Average monthly transactions per Kenyan banking customer in 2008
-Jim Rosenberg
by Mark Pickens : Friday, January 22, 2010
Some of you probably saw a snippet on the nightly news about Secretary Clinton’s speech on Thursday about freedom of the internet and other technology. If you read CGAP’s recent focus note on the future of branchless banking in 2020, you’d know we also think the internet is going to have a deep qualitative impact.
It turns out Secretary Clinton had a lot to say about mobile banking. I found three parts particularly relevant for the work we do on banking the unbanked.
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by Chris Bold : Tuesday, January 19, 2010
Today we welcome Chris Bold as a new blogger for CGAP. Recently, Chris joined CGAP’s Technology Team on leave from the UK Department for International Development where he worked in their Financial Sector Team and, for the last year and a half, was based in Kabul managing DFID’s private sector development programs in Afghanistan. Chris will be providing additional support to CGAP’s portfolio of projects and exploring how large flows of money such as government payments and remittances can be harnessed to bring financial services to the unbanked.
It’s hard to think of a tougher environment in which to test the potential of mobile banking than Afghanistan. With a population of 30 million people, 36% of whom live below the government defined poverty line and 74% of whom are illiterate; Afghanistan is the poorest country in the world outside Africa. But bringing banking services to Afghanistan is exactly the challenge that Roshan, an MNO majority owned by the Aga Khan Fund for Economic Development, is taking on. We met with Zahir Khoja, Roshan’s Executive Director for M-Paisa, on a recent visit to Afghanistan to discuss the roll-out.
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by Kabir Kumar : Wednesday, November 11, 2009
The m-banking industry (for the unbanked) has become accustomed to describing m-banking businesses as bank-led, telco-led, and third-party. The three categories are particularly useful in explaining who is driving the business operationally and who might control the revenues. The categories have particular currency in policy circles where the top-line question is what to do with non-banks.
I am particularly intrigued by the different arrangements we see today and would ideally prefer a typology of sorts that helps us make sense of a more complex market. For example, it is useful perhaps to ask where is Safaricom likely to take M-PESA next and situating M-PESA as something other than telco-led may help us shed a light on that future.
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by Jim Rosenberg : Monday, February 18, 2008
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