The Bankwatch

Tracking the consumer evolution of financial services

North American and European mobile banking has a lot to learn from Afghanistan people

This is an amazing piece of work on mobile money (Hat tip to Chris Skinner for this link), but it is more than that.  It speaks to intrinsic value and the creative ability of people to develop banking and money systems for themselves with the tools available.  Here the tools are things such as goats, seeds eggs and gold.  The competition in this environment is hawala, an informal but trusted method of couriers.

This is Afghanistan.  Jan Chipchase is someone I first came across at LIFT in 2007.  Then he was with Nokia, and is now Executive Creative Director of Global Insights at frog design, based out of Shanghai. This Afghanistan project is funded by the Gates Foundation.  One of the many remarkable elements of this Afghanistan project is that I recognize all the town names, and not for good reasons.

If all you do is spin through the powerpoint entitled ‘JanChipchase-themobilefrontier-vFinal’ you will realise this is an amazing story.

Relevance to Bankwatch:

It shows how little we understand the power of mobile in North America and Europe.  In fact when you get right down to it, despite the inconveniences, North American mobile services do not have much additional functionality than M-paisa in Afghanistan.  In fact many banks do not even have the capability of sending money from one person to another electronically.


There are four attachments in the post and they are worth the click through.  Here is my summary to whet your appetite.

Mobile Money, Afghanistan: Researching the Mobile Frontier

The idea of mobile money became concrete in 2007. In that year, after a pilot
program supported by the United Kingdom’s development aid organization and
Vodafone, the Kenyan mobile network Safaricom launched its M-PESA service.
M-PESA permits person-to-person money transfers via mobile phone using an
extensive network of M-PESA agents throughout the country. The sender initiates
a transfer via text message and the recipient of the message goes to an agent to
collect the cash. As of late 2010, M-PESA had over 12 million subscribers and had
become an integral part of Kenyans’ everyday lives.


Salid has experienced radical change enough times to know the importance
of spreading around his investments—over the years he has put his money into
livestock, gold, and most recently, property. A peek inside his wallet reveals a bank
card and a wad of Afghanis (AFN), the local currency, and US dollars.

She has a bakht account with Kabul Bank, which is a special lottery-style
account through which she is entered into regular draws for prizes that can include
anything from cash and computers to cars and even apartments. The principles of
Sharia law forbids the payment of interest on bank accounts, but local banks get
around this by paying mafad (benefit), and they incentivise savings through a variety
of means including bakht (luck) or qismat (fortune) accounts.

While the (M-Paisa) transfer was indeed inexpensive (AFN 25, USD 0.55) and seemed
secure, Mariam became ashamed when her friend told her how inconvenient it had
been to pick up the money.
This friend had spent two hours trying to cash out the transfer before she was
successful. Over an hour was spent combing the streets of Kabul trying to find an
M-Paisa agent, who upon hearing her cash-out request, said he didn’t have enough
money on hand, and asked her to return the next day. This person was located on
the fourth floor of a nondescript office building in downtown Kabul, with nary a
sign on the street or on the building to indicate the presence of an M-Paisa agent

Farooq maintains that it’s not his responsibility to ensure the IDs provided by
customers are valid. “How would I know if an ID card is real? Anyone can get one on
the street for AFN 500 (USD 11), or by knowing the right person; it’s not my problem
if someone uses a fake one. How can I tell? Maybe M-Paisa should just accept
thumbprints like the hawala agents. Then people that can’t read can use it, too.”



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Written by Colin Henderson

April 10, 2011 at 16:56

Posted in Uncategorized

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