Identifier
Created
Classification
Origin
09KABUL268
2009-02-08 04:18:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Kabul
Cable title:  

FINANCIAL SERVICES NOW AVAILABLE THROUGH MOBILE PHONES IN

Tags:  ECIN ECPS ETRD EFIN AF 
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VZCZCXRO5675
PP RUEHIK RUEHPOD RUEHPW RUEHYG
DE RUEHBUL #0268/01 0390418
ZNR UUUUU ZZH
P 080418Z FEB 09
FM AMEMBASSY KABUL
TO RUEHC/SECSTATE WASHDC PRIORITY 7144
INFO RUEATRS/DEPT OF TREASURY WASHINGTON DC 0725
RUEHNR/AMEMBASSY NAIROBI 0065
RUCNAFG/AFGHANISTAN COLLECTIVE
RUEHZG/NATO EU COLLECTIVE
RUEABND/DEA HQS WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
UNCLAS SECTION 01 OF 02 KABUL 000268 

DEPT FOR SCA/FO, SCA/RA, AND SCA/A
DEPT PASS AID/ANE
DEPT PASS USTR FOR DELANEY AND DEANGELIS
DEPT PASS OPIC
DEPT PASS TDA FOR STEIN AND GREENIP
CENTCOM FOR CSTC-A
NSC FOR JWOOD
TREASURY FOR MHIRSON, ABAUKOL, BDAHL, AND MNUGENT
OSD FOR SHIVERS
COMMERCE FOR DEES, CHOPPIN, AND FONOVICH

SENSITIVE

SIPDIS

E.O. 12958 N/A
TAGS: ECIN ECPS ETRD EFIN AF
SUBJECT: FINANCIAL SERVICES NOW AVAILABLE THROUGH MOBILE PHONES IN
AFGHANISTAN

UNCLAS SECTION 01 OF 02 KABUL 000268

DEPT FOR SCA/FO, SCA/RA, AND SCA/A
DEPT PASS AID/ANE
DEPT PASS USTR FOR DELANEY AND DEANGELIS
DEPT PASS OPIC
DEPT PASS TDA FOR STEIN AND GREENIP
CENTCOM FOR CSTC-A
NSC FOR JWOOD
TREASURY FOR MHIRSON, ABAUKOL, BDAHL, AND MNUGENT
OSD FOR SHIVERS
COMMERCE FOR DEES, CHOPPIN, AND FONOVICH

SENSITIVE

SIPDIS

E.O. 12958 N/A
TAGS: ECIN ECPS ETRD EFIN AF
SUBJECT: FINANCIAL SERVICES NOW AVAILABLE THROUGH MOBILE PHONES IN
AFGHANISTAN


1. (SBU) SUMMARY: In October 2008, Roshan Telecom in partnership
with First Micro Finance Bank of Afghanistan formally launched
M-Paisa, a money transfer service through cell phones. M-Paisa
allows cell phone users to deposit and withdraw funds through a
licensed agent and then send and receive cash and make bill and loan
payments through cell phones. In January 2009, Roshan boasted over
13,000 subscribers and 150 licensed agents. Roshan works closely
with Da Afghanistan Bank (DAB),the Afghan central bank, to monitor
transactions and highlight illicit activity. Roshan officials are
optimistic about M-Paisa's prospective growth. By year's end,
Roshan intends to expand to over 1,000 M-Paisa agents and to offer
salary direct deposit through M-Paisa. M-Paisa is a positive step
towards providing financial services to "unbanked" populations and
could help the government of Afghanistan, in partnership with
Roshan, build faith in financial services and develop capabilities
in detecting and disrupting illicit financing. END SUMMARY.


2. (SBU) In a January 27 meeting, Roshan Telecom's Head of
Government Relations Samir Saatchu and Director of Mobile Commerce
and Product Marketing Zahir Khoja outlined to Econoff and Treasury
Attach Roshan's ambitious new mobile money transaction program,
M-Paisa. With its partner First Micro Finance Bank, Roshan formally
launched M-Paisa October 28, 2008, and the program now has 13,000
subscribers. M-Paisa allows mobile phone users to deposit,
withdraw, send, and receive money using their cell phones.


3. (SBU) M-Paisa works through SMS communication and a network of
Roshan agents. Roshan customers register for M-Paisa with their
identity documents (passport or government-issued national
identification card, "tazkara"). Upon registration, customers can
deposit money into their M-Paisa account through the agent. They
then receive a text message indicating their balance. At this

point, M-Paisa customers can use their phones to send money to
another person. The recipient of an M-Paisa money transfer receives
a text message on his mobile phone indicating that money has been
sent to him. To redeem the credit, the recipient must visit one of
Roshan's 150 agents to withdraw the funds. Users do not need to be
Roshan mobile phone customers to receive money, but in order to open
an M-Paisa account with an agent for depositing funds, users must
have a Roshan account. M-Paisa customers can use English, Dari, or
Pashto for the user interface and SMS messaging. To reach
illiterate customers, Roshan has designed an interactive voice
recognition (IVR) system to guide users through the interface. In
addition to money transfer, users can pay bills and manage loan
payments using M-Paisa.


4. (SBU) Roshan officials highlighted the systems in place to
prevent fraud and illicit transactions including a withdrawal limit
of 2,000 USD per day and daily monitoring of transactions. Khoja
notes that Roshan rejects new accounts daily because the tazkara or
passport ID number used to register in these cases is already
attached to an existing account. For example, someone who lives in
Herat may have the same tazkara number as someone who lives in
Jalalabad. Roshan is working with the Afghan government to resolve
this issue. Khoja and Saatchu said that, in general, the national
ID card requirement limits Roshan's target customer base for M-Paisa
since only about 9 million of Afghanistan's 30 million people have
IDs. As a licensed money service provider, Roshan is responsible
for monitoring all transactions, reporting suspicious activity to
the DAB, and providing the DAB with monthly reports of all
transactions. To bolster their ability to report suspicious
activity, Roshan says it is actively recruiting a full-time
compliance officer.


5. (SBU) Roshan officials are optimistic about M-Paisa's prospective
growth. They note the case of Kenya as an example of how M-Paisa
can offer a viable alternative to hawalas for the "unbanked"
population. Khoja said that Kenya currently has 3.5 million users
and reports 300 million USD in transactions per month. Roshan
expects to have over 1,000 agents by year's end. Currently Roshan
has a pilot salary direct deposit program through M-Paisa with its
own employees. Roshan plans to roll out the direct deposit program
commercially later in the year. Khoja says that the Afghan National

KABUL 00000268 002 OF 002


Police (ANP) have indicated an interest in such a program. ANP
could more easily and transparently pay their officers in the
provinces through M-Paisa rather than entrusting salaries to a
police commander who may not pass on all of the salary money to his
officers.


6. (SBU) Roshan officials acknowledge that there are still some
glitches in the direct deposit program. For example, Afghan
employees tend to withdraw all of their salary on payday because
they do not trust not having their salaries in hand. Roshan
officials said that direct salary deposit service will require
additional planning and coordination throughout the country. Roshan
said that they need to prepare agents to have the cash on hand to
accommodate numerous withdrawals on payday. Roshan told Emboffs
that they are exploring other options for expansion, including a
partnership with Western Union to provide money transfer services
using M-Paisa at Western Union locations.


7. (SBU) COMMENT: M-Paisa is a positive step towards providing
financial services to the "unbanked" population and bringing
Afghanistan into the 21st century. M-Paisa also offers greater
financial transparency as the Government of Afghanistan continues
work to provide heightened supervision in areas vulnerable to money
laundering and terrorist financing. As M-Paisa expands and gains
the trust of ordinary Afghans, we anticipate an increasing number of
Afghans will choose this service over the more traditional and less
transparent services offered by "hawala", a popular method of money
transfer in Afghanistan. Moreover, this new service can offer a
direct link between the lowest level police officer and his salary,
ensuring that he receives his entire salary. A deal with the ANP
could help diminish the control that police supervisors have on
subordinates' remuneration and provide access to those in rural
areas where electronic funds transfer is unavailable due to the lack
of banking facilities. However, we have heard from reliable sources
that the deal with ANP is in flux because Roshan will not accept
liability for ANP's payments. END COMMENT.


WOOD