Overview
M-Paisa is a mobile money service operated by Roshan (Telecom Development Company Afghanistan Ltd.). Launched commercially in 2009, M-Paisa was Afghanistan's first mobile money platform and became the most prominent digital financial service in a country with extremely limited banking infrastructure. The service enabled P2P transfers, salary disbursement, bill payments, and humanitarian cash distribution. M-Paisa's most significant impact was disbursing Afghan National Police salaries, a program that demonstrated how mobile money could reduce corruption in cash-based government payment systems. At peak, M-Paisa had over 1.5 million registered accounts (unverified). The August 2021 Taliban takeover severely disrupted operations, and the current operational status remains uncertain.
History
M-Paisa originated from a 2008 Roshan pilot with Vodafone's M-Pesa technology, testing mobile-based microfinance loan repayments. Commercial launch followed in 2009. The transformative moment came when M-Paisa was selected for Afghan National Police salary disbursement under a program supported by USAID and the Ministry of Interior. Research by Blumenstock, Callen, and Ghani documented that officers receiving salaries via M-Paisa effectively received higher net pay because the digital channel eliminated 10-30% leakage to intermediaries.
Beyond government salaries, M-Paisa was adopted by international NGOs and UN agencies for cash assistance in areas inaccessible to banks. Adoption remained limited by low literacy, cultural barriers, and the dominant informal hawala system. The August 2021 Taliban takeover -- combined with sanctions, frozen DAB reserves, NGO withdrawals, and collapsed correspondent banking -- undermined M-Paisa's operating environment. Current scope is not publicly documented.
How It Works
M-Paisa was designed for a low-literacy, feature-phone market. Users registered at Roshan retail outlets or agents with a tazkira (national ID) or other accepted identification; simplified KYC was permitted for basic accounts. Cash-in and cash-out happened at agent locations. Transfers were initiated via USSD menu entering recipient mobile number and amount. Employees enrolled in mobile salary programs had wages credited directly. The service operated primarily via USSD with IVR features to assist low-literacy users.
Services Offered
Core Services
- P2P money transfer
- Cash deposit and withdrawal via agents
- Airtime top-up (Roshan)
- Balance inquiry
Payments and Disbursement
- Afghan National Police salary payments: The flagship use case delivering monthly salaries directly, bypassing intermediaries
- Private sector salary disbursement for employers working with international organizations
- Humanitarian cash transfers operated by WFP, UNHCR, and USAID implementing partners
- Limited merchant payments in urban Kabul
- Utility payments where integrated
- Microfinance loan repayment
Fees & Charges
M-Paisa used a tiered fee structure:
- P2P transfers: Fee charged to sender, tiered by amount (exact schedules not publicly available for recent periods)
- Cash-out at agent: Tiered by amount
- Salary receipt: Free to recipient
- Airtime: Free or nominal
Fee structures may have changed significantly given post-2021 disruptions.
Regulatory & Licensing
M-Paisa operated under a mobile money license from Da Afghanistan Bank (DAB) under DAB's Mobile Money Regulations (issued ~2011). Customer funds were held in escrow at licensed commercial banks. Roshan complied with DAB's KYC and AML requirements, adapted to Afghanistan's limited formal documentation. The regulatory status under the post-2021 Taliban-administered DAB is unclear.
Infrastructure & Network
- Agent network: Through Roshan retail outlets and authorized agents, numbering in the thousands at peak (exact figures not public), concentrated in provincial capitals and major towns. Agent liquidity was a persistent challenge in remote and conflict-affected areas
- USSD access: Primary channel on all mobile phones on Roshan's network
- IVR assistance: Voice menu for low-literacy users
- Coverage: Roshan's network covered the majority of Afghanistan, though remote mountainous areas had limited coverage
- Technology: Built on Vodafone's M-Pesa platform, adapted for Afghanistan
Market Position & Competition
M-Paisa was the dominant mobile money platform by a significant margin. Its primary formal competitor was mHawala (Etisalat Afghanistan), with a much smaller user base. However, M-Paisa's true competitive landscape was not other digital wallets but the deeply entrenched informal hawala system, which handled the vast majority of value transfers. Hawala offered advantages in reach, trust, and speed. M-Paisa's competitive advantage was in use cases requiring formal documentation and transparency -- government salary payments, international organization disbursements, and NGO cash transfers.
Ownership
Operated by Roshan (Telecom Development Company Afghanistan Ltd.):
- Aga Khan Fund for Economic Development (AKFED): Majority shareholder. AKFED is the economic development arm of the Aga Khan Development Network
- Monaco Telecom: Minority shareholder (itself majority-owned by Xavier Niel's NJJ Capital)
Roshan was one of Afghanistan's largest telecom operators with ~6-7 million subscribers pre-2021 (unverified). The broader AKDN presence in Afghanistan -- spanning education, healthcare, and rural development -- provided deep community connections, particularly in northern and central regions.
Controversies
- Post-Taliban-takeover uncertainty: The most fundamental challenge is the uncertain future of M-Paisa and the entire formal financial system following August 2021. Sanctions, frozen reserves, and NGO departures have undermined the operating environment.
- Dependence on institutional use cases: A large share of transaction volume was driven by government salaries and NGO cash transfers rather than organic consumer adoption. The withdrawal of these institutional users post-2021 removed a major volume source.
- Corruption in the salary program: While M-Paisa reduced leakage, reports indicated that some "ghost" police personnel (fictitious names on payrolls) continued receiving salaries via mobile money, suggesting technology alone did not eliminate all corruption.