Market Research on Mobile Money in Afghanistan

Of these subscribers, only two-thirds actually perform functional transactions, with most services essentially not used at all. Mobile money users are predominantly recipients of funds and prefer to withdraw money from banks even if non-bank agents are easier to reach. Most users were forced to subscribe by their employer to receive their salary, and would prefer to be paid in cash. A lack of savings and of a need for financial services, low awareness, the perception that mobile money is too complicated, and to some un-Islamic, have been identified as barriers to market penetration. Respondents also suggest a critical mass of users is necessary for them to subscribe. Access to mobile money agents continues to be a major issue, as well as the reputation and liquidity of agents, in particular non-bank agents. Mobile money agents have reportedly little incentive to promote the service due to users' preference to withdraw all of their money at once, which jeopardizes profitability of agents since withdrawal fees are capped. The respondents' positive perception of mobile network operators (MNOs) and mobile money services, once made aware, as well as the safety and convenience of using mobile money – in particular for women – are the main levers for penetration. The study recommends focusing on businesses and government to build a critical mass, increasing awareness of the service and educating potential customers, developing a customer-friendly and easy-to-access interface in local languages, developing the ecosystem and incentivizing "active" usage, addressing agent liquidity issues and training agents to ensure better service, and enabling interoperability of MNOs. The study used a combination of quantitative (survey) and qualitative research (focus group discussions – FGDs) to capture robust data on financial services across Afghanistan with a focus on mobile money. A sample of 1,070 individuals were interviewed, including equal representation of men and women over the age of 18 of representative educational and socio-economic backgrounds from all 34 provinces in Afghanistan. The sample for each province was n=30 interviews, with a fixed allocation of n=20 in rural areas and n=10 in the provincial capital. The margin of error at a confidence level of 95% on the quantitative survey is 3%. SIM ownership is higher in the West, East, South, and Central regions due to large urban centers. Regionally, 62% of the sample own one SIM card or more. Nationally, 44% of rural females and 66% of rural males own at least one SIM card, in contrast to 84% of urban respondents. The questionnaire consisted of 74 predominantly closed-ended questions and was designed to be completed in approximately 30 minutes, depending on the level of education and literacy of the interviewee. The questionnaire was designed in English, Dari, and Pashto by a team composed of national and international researchers to ensure both a proper technical approach and a full understanding of Afghan culture and languages. The FGDs were organized in Kabul, Mazar-e-Sharif, and Jalalabad, consisting of mobile money users and non-users among men and women of the general Afghan public, as well as with users and non-users among businesses. In total, 8 FGDs were conducted with the general public and 4 with businesses. The FGDs were conducted by experienced Altai professionals with the support of discussion guidelines in Dari and in Pashto. FGDs with women were moderated by Altai female staff only.