Gregory Howell is the Deputy Director of the Office of Economic Growth and Infrastructure at USAID’s Afghanistan Mission in Kabul, Afghanistan.

Traditionally, USAID Missions have man­aged development programs by segmenting activities into technical offices such as democracy and governance, economic growth, health, education, and infrastructure. Crossfertilization takes place occasionally, when mutual interests are identified; but meaningful collaboration is rare. The focus on mobile money in Afghanistan breaks out of the usual stovepipes, demonstrating how dynamic teams bringing expertise from different disciplines in partnership with host-country counterparts can contribute to a collective goal—even in a difficult operating environment.

Ten years after the introduction of mobile-phone technology to the country, more than half of all Afghans have mobile phones, and more than 80% have access to a mobile-phone network. But only 7% of Afghans have a bank account.

By leveraging the mobile-phone network to provide financial services to the unbanked, key public- and private-sector services can be improved to serve hundreds of thousands of women and men across the country. With mobile money, a teacher can receive her salary in full and on time in a remote district; a police officer can transfer funds to his family back in his home village; and a  business­ woman can repay her microloan without having to spend valuable time away from her business. Once customers have registered for the ser­vice, they can visit a local mobile-money agent to withdraw actual cash that had been deposited in their mobile wallet. The agent serves as the ATM, exchanging mobile money for cash once the customer inputs a PIN number into the phone. Mobilemoney service provider bank accounts pool funds from all clients in at least four banks to diversify risk.

Mobile money can fundamentally transform the lives of Afghans, just as it has in Kenya, the Philippines, and a growing list of countries around the world. USAID’s strategic approach focuses on three main areas of intervention:

  • Engaging with key stakeholders, including government ministries, private-sector companies,
    and international donors
  • Ensuring an appropriate legal and regulatory environment and support from relevant host country government agencies
  • Encouraging innovation through public-private partnerships that could lead to greater inancial
    inclusion and development results

Read the full article in USAID’s Frontiers in Development Publication.