Innovating In Afghanistan

"In 2002, fewer than 200,000 people in Afghanistan had access to telephones. Today, some 15 million Afghans use mobile phones and a full 85 percent of the population lives within the combined network coverage of the four major telecommunications companies. This technological leap connects Afghans to each other and to the economy in ways that were unimaginable just a few years ago," the Administrator of the United States Agency for International Development (USAID) Rajiv Shah said recently in Kabul when announcing three USAID grants for further technological innovations, totaling more than $2 million.

The wide availability of mobile phones opens up possibilities for finding new solutions to challenges that Afghans face every day. These three USAID grants aim to help create a mobile banking system that all Afghans could use.

The Afghan Education Minister recently highlighted the urgent need for mobile payments when a staff member of the Education Ministry was killed while transporting cash in northern Afghanistan to pay teachers. In fact, thousands of Afghan teachers had to wait months to get paid due to the difficulties and dangers of transporting money. "I am delighted that USAID is able to help seed a partnership between the Afghan Education Ministry and a mobile phone operator to begin paying teachers . . . thus ensuring that they get paid in time, and more importantly, that no Education Ministry employee loses his life for a duffle bag of cash," Administrator Rajiv Shah said.

The second grant is designed to connect the new Afghan electricity utility with mobile phone billing and payment for electricity service. "Delivering electricity to all Afghans will require a revenue model that will sustain operations, motivate more public and private investment, and expand Afghanistan’s energy grid so that fewer communities live in the dark," Administrator Rajiv Shah said.

The third grant funds a partnership of another telecommunications company with a micro finance consortium whose clients are predominantly women. "Running loan extensions and repayments over mobile phones significantly reduces the need for loan officers and clients to travel. This cost savings can be passed on to the customers, making credit more affordable," Administrator Rajiv Shah concluded. "I am proud that United States Agency for International Development is able to help unleash Afghan innovation."