MICROCAPITAL BRIEF: Central Bank of Afghanistan Issues Electronic Money Institution License to M-Paisa

The Central Bank of Afghanistan has issued an electronic money institution (EMI) license to M-Paisa, a mobile technology platform that provides financial services targeted at those without access to banking.

M-Paisa was inspired by M-Pesa, a Kenyan cellphone-to-cellphone cash-transfer service launched in early 2007 by Safaricom Limited, a Kenya-based cellphone service provider, in association with Vodafone, a British multinational mobile network operator. Roshan, an Afghani telecommunications operator with 4 million subscribers introduced M-Paisa to Afghanistan in 2008 in partnership with Vodafone.

Since that time, M-Paisa has been operating under a money service provider (MSP) license. The EMI license is said to complement the firm’s exiting MSP license by expanding the range of financial services that can be provided via mobile phones. The Central Bank of Afghanistan has recently introduced the EMI licensing process in an effort to better serve the growing demand for mobile money services in Afghanistan [1].

The governor of the Central Bank of Afghanistan, His Excellency Abdul Qadeer Fitrat, was quoted as having said, “Today, we are pleased to extend Afghanistan’s first electronic money institution license to M-Paisa, a pioneer in mobile money. The issuance of this license is an important step forward for the financial system in Afghanistan, and in providing transparent ways to conduct financial transactions” [1].

By: Alexandra Pattee, Research Associate

About M-Paisa: M-Paisa is a mobile technology platform that provides access to financial services in Afghanistan. M-Paisa was inspired by M-Pesa, a Kenyan cellphone-to-cellphone cash-transfer service launched in early 2007 by Safaricom Limited, a Kenya-based cellphone service provider, in association with Vodafone, a British multinational mobile network operator. Roshan, an Afghani telecommunications operator, in partnership with Vodafone, introduced M-Paisa to Afghanistan in 2008. M-Paisa operates on Roshan’s mobile network, which covers 230 cities in Afghanistan.

About M-Pesa: M-Pesa is a Kenya-based cellphone-to-cellphone cash-transfer service. (The M stands for “mobile”, and pesa means “cash” in Swahili.) Launched in 2007 by Safaricom Limited, a Kenya-based cellphone service provider, M-Pesa was developed by Vodafone Group Private Limited Corporation, a British multinational mobile network operator, as part of its strategy to reach poor people with new goods and services. In May 2009, M-Pesa reported having 6.5 million subscribers.

Additional Sources and Resources:

[1] Roshan Press Release, “The Central Bank of Afghanistan Issues First Electronic Money Institution License to M-Paisa”, http://www.roshan.af/Roshan/Media_Relations/News/News_Details/11-04-26/The_Central_Bank_of_Afghanistan_Issues_First_Electronic_Money_Institution_License_to_M-Paisa.aspx

MicroCapital.org Article, February 13, 2008, “Vodafone and Roshan to Serve Microfinance Institution Customers Via M-Paisa Branchless Banking, the First Mobile Money Transfer Service in Afghanistan”, https://www.microcapital.org/press-release-vodafone-and-roshan-to-serve-microfinance-institution-customers-via-m-paisa-branchless-banking-the-first-mobile-money-transfer-service-in-afghanistan/

MicroCapital’s Microfinance Universe: M-Pasia, will include link once approved

MicroCapital’s Microfinance Universe: M-Pesa: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=M-Pesa

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