Panel of the 2007 Internet governance forum in Brazil listening

2007 IGF in Brazil

Stakeholders from around the world met in Geneva last week to finalize the program for the sixth annual 2011 Internet Governance Forum (IGF) which will be held in Nairobi in September. The focus of this year’s event will be on how to govern mobile Internet.

The consultations this past week garnered consensus for the final program and agenda for September.

Participants from around the world met in Geneva with the aim of maximizing the opportunity for the IGF to enable open, inclusive dialogue and draw on their experience.

Alice Munyua, Project Director for Catalyzing Access to ICTS for the Communications Commission of Kenya (CCK), chaired the second preparatory consultations of the IGF.

The finalized program is developed through and open process that began earlier this year and is overseen by a “Multi-stakeholder Advisory Group” of experts appointed by the UN Secretary General.

This year’s theme for the 2011 IGF is, “The Internet as a Catalyst for Change: Access, Development, Freedoms and Innovation”.

The stakeholders had an extensive discussion about what workshops would be important to include on the role of mobile, Internet, technology and their contribution to development.

A question to be highlighted in the forum was posed by a representative of the International Code Council (ICC): how will governance for the mobile Internet be differentiated from the wired world?

She divulged that governing this divide must be addressed as mobile has become a crucial part of how developing regions can tap into the marketplace:

On the area of mobile services and in particular for the region, it’s really an entry point to the Internet for many points of the world. There’s a leapfrogging, in essence, into this space. And I think examples of the mobile banking have been really exemplary in that.

With more than 4 million Kenyans accessing Internet through their mobile phones, this year’s IGF will prove to be an important forum for discussing and considering these issues, how they affect people in developing regions, and how it should be governed.

“…As you know, the lack of experts in capacity in relevant Internet governance issues is hampering participation of developing countries, especially Africa, on the policies, standards and also critical issues,” a representative for the United Nations Economic Commission for Africa (UNECA) stated in the consultations.

During the four days of the IGF in Nairobi, the main workshops will focus on issues such as broadband and mobile access; the resources critical to the stabilization and secure operation of the Internet; cybersecurity, privacy and Internet rights; along with innovative entrepreneurship and digitalizing local content.

Additionally, the multi-stakeholder team of experts have organized over 90 workshops to  cover a broad range of Internet policy and technology issues.

At an OECD Meeting on May 27th, 2011, Administrator Shah outlined three areas of reform for USAID, one of which was “leveraging the role of science and technology,” particularly through mobile phone banking systems.  The announcement should not come as a surprise, given the growing movement among the leaders of the agency to support mobile phone programs.

Mobile Banking

Photo Credit: USAID

Shah’s announcement is coupled with his recent talk with MIT economist Esther Duflo at the USAID Development Forum on May 23rd.  During the question and answer session, Shah referred to the power of mobile banking, citing the financial security it provides to rural farmers.

In addition to voicing support for mobile banking, USAID has supported specific initiatives, coming to an agreement last year with the Gates Foundation to provide a $10 million incentive fund to companies in Haiti who provide mobile financial services.  Speaking about the fund, Shah said, “Before the earthquake, fewer than 10 percent of Haitians had ever used a commercial bank.  A mobile money system can restore and remake banking in Haiti and serve as an engine of inclusive growth.”

Eric Postel, assistant administrator at EGAT, has led USAID’s mobile money programs in Haiti, including one project that allows Haitians to purchase emergency relief food supplies via mobile money payments.  Postel praises Haitian shop owners who accept mobile payments, which, he claims, are “broaden their client base” and lower their risk by not carrying cash payments to the bank.

 

Mobile Banking in Haiti

Photo Credit: USAID

Other leaders in USAID have shown support for mobile banking as well.  Maura O’Neill, Chief Innovation Officer at the USAID Development Innovation Ventures in the Office of the Administrator, recently co-hosted the Mobile Money Summit in Afghanistan.  At the summit, the USAID Mobile Money Innovation Grant Fund was announced, which aims to create unique public-private partnerships to encourage mobile banking.  Currently, “only 4% of Afghans have bank accounts,” and given the success of M-PESA in Kenya and similar services worldwide, mobile banking is a legitimate solution to this problem.  O’Neill attended the summit with Senior Advisor to the Administrator Priya Jaisinghani, another notable expert in mobile banking.

USAID’s interest in mobile projects is not new.  In 2008, USAID commissioned a report on the use of phones in citizen media.  As well, numerous projects targeting women in development, have utilized mobile phones.  Mobile banking, however, appears to be a high priority for USAID currently.

 

Woman with a phone with the Esoko app.

Esoko application billboard in Accra, Ghana

The global movement to improve agriculture and natural resources management through ICT takes center stage this week at the fourth InfoDev Global Forum in Helsinki.

Though in its nascent stage, the forum attracts a wide cross-section of attendees (business incubator managers, policy-makers, SMEs, financiers and development agencies)  from around the globe “for a unique South-South and North-South networking and knowledge-sharing experience”.

The four day forum, which ends on June 3, zeros in on mobile applications for agri-businesses and clean technologies. Yesterday, a  high level panel discussion featuring experts from the World Bank, FAO, AgriCord, Uganda and Kenya examined the varied use of mobile technology in agriculture and the management of natural resources, namely forestry. The discussion was a prelude to the launch of a new virtual resource that the experts believe will function as a “living updatable document”.

The e-Sourcebook “Information and Communication Technologies for Agriculture” will be released in October. The resource will feature a plethora of ICT innovations and examine their potential to improve agricultural development.

This year marks the fourth staging of the bi-annual event, which is functioning within the framework of a joint program with the Government of Finland and Nokia to create sustainable businesses for a knowledge economy. The $17 million program seeks to enhance the competitiveness of the information and communication technologies (ICT) and agribusiness sectors in small and medium sized emerging markets.

A key feature of the two year initiative is the use of mobile technologies to provide content, services and applications for developing countries. This development comes less than a year after global mobile subscriptions topped five billion, according to the International Telecommunication Union (ITU).

Despite improvement in mobile subscriptions, access to fixed phone lines and internet usage, the ITU says one billion people worldwide still lack connection to any kind of ICT. This is particularly problematic for the drive to improve agriculture as  most  people without access to any form of ICT depend on agriculture to some extent  for their livelihoods.

The Global Forum was last held by Brazil in 2009.

Ugandan man throwing a brick into a fire

Photo credit: Reuters/Edward Echwalu

Protests over rising fuel and food prices continue despite Ugandan government attempts to slow them down by blocking Facebook, Twitter, and censoring media content.

Last week, President Yoweri Museveni cited social media and negative media coverage as primary proponents of fueling social unrest amid state led violence.

Protestors boycotted fuel purchases by “walking to work” for the past two months in an effort to demonstrate against the government spending at a time of heightened government expenditures.

In Uganda, the price of staples such as wheat have increased up to 40%, according to the World Bank.

UCC wrote to all ISPs last month asking them to block access to the two social media websites for 48 hours, but their request was denied.

“If someone is telling people to go and cause mass violence and kill people and uses these media to spread such messages, I can assure you we’ll not hesitate to intervene and shut down these platforms,” Godfrey Mutabazi, executive director of the Uganda Communications Commission (UCC) stated last month.

The Uganda’s communications regulator relies on Internet service providers to enforce their demands, as they cannot block access to the sites themselves.

Separately, last week Museveni described both local and international media, like the BBC, as “enemies of the state” at a time when journalists are reporting brutal assaults and harassment by security forces.

Journalists have imposed a news blackout on the Ugandan government in protest against what they described as rising brutality against covering demonstrations over the high prices. The media blackout includes official police and army functions.

Following Museveni’s warning this week, the outgoing Minister for Information, Kabakumba Masiko, told BBC’s Network Africa program that Ugandan laws would be amended to deal with any journalist who behaves as an “enemy of the state”.

She state on the program:

If you look at the way these media houses have been reporting what has been going on in our country, you realise they were inciting people and trying to show that Uganda is now ungovernable, is under fire as if the state is about to collapse.

Early last year the minister took a proposed Press and Journalist Amendment Bill to the Cabinet, where it creates a new publication offense of “economic sabotage”.

 Ugandan president  Museveni with paper accusing media of sabotage

Museveni accused media of sabotage in 2008 address Photo credit: Monitor

If passed, the law would give absolute dominance to Media Council, the statutory regulator, the authority to revoke the license of any media outlet that publishes “material that amounts to economic sabotage”.

The officials’ efforts are part of a recent trend by autocratic governments to block social media sites and having media blackouts to control social movements.

The US State Department spokesman issued a statement of concern in how blocking communication mediums adversely affects civil society.

“We are also concerned by reports that the Ugandan government has attempted to restrict media coverage of these protests and, on at least one occasion, block certain social networking websites,” the statement said.

The ongoing role of social media and the concurrent suppression of media freedom in anti-government protests make governments’ actions against civil society measurable and accountable.

It is clear that the future of reporting will be increasingly difficult for authoritarian countries to really control what their people see and hear.

 

 

On May 16-20th, world leaders gathered in Geneva for the annual World Summit on the Information Society (WSIS) Forum.  Speakers emphasized the role of incorporating ICTs into all aspects of the MDGs as opposed to the previous goal of providing ICT access.

This type of rhetoric respecting the role of ICTs is different than previous global summits and conferences.  In 2000, when the Millennium Development Goals (MDGs) were first released, the eightieth goal – Global Partnership – included a specific target to “make available new technologies, especially information and communications.”  Subsequently, the 2010 MDGs Report included measurements of ICT availability and number of users.  In this report, ICT usage was the primary goal.

However, more recently, the ITU and UNESCO announced the establishment of the Broadband Commission for Digital Development, which embraces ICTs as “uniquely powerful tools for achieving the MDGs.”  One of the commissioners, Bruno Lanvin, boldly explains: “Broadband is not just about infrastructure…it presents the opportunity for a quantum leap.  …We may soon discover that Broadband has been the biggest absolute accelerator in our efforts to realize the MDGs.”

The shift in rhetoric surrounding ICTs is now beginning to affect international measurements.  For example, last month the World Economic Forum released The Global Information Technology Report 2010-2011, and announced new changes to the Network Readiness Index.  The WEF acknowledged that the original index “falls short in looking at the impacts of ICT usage,” and in their revised index elements such as business innovation, governance, citizens’ political participation, and social cohesion are incorporated, demonstrating the acceptance of ICTs as important development tools in all sectors.

A keynote speaker at the WSIS Forum, Mr. Mohammed Nasser Al Ghanim, Director General of the Telecommunications Regulatory Authority in the UAE, explained that ICTs are crucial for “every sector of the economy and contribute to areas so diverse as health, education, and public safety.”

Other forum sessions at the conference further emphasized the importance of ICT utility in achieving all of the MDGs, including “Better Life in Rural Communities with ICTs,” and “ICTs as an enabler for Development of LDCs.”

The second day of the conference, May 17th, was the annual World Telecommunications and Information Society Day.  In a public video celebrating the event, ITU Secretary-General Hamadoun I. Touré states: “It is time for global action to connect rural communities to the opportunities offered by ICTs.”

The WSIS Forum 2011 verified the need to utilize ICTs to accelerate the completion of all the MDGs.  This change in rhetoric and measurements regarding ICTs will likely affect public policy in the short future.  The WSIS Forum 2011 was an important marker in the history of ICT4D.  ICT access and connectivity is the means to making sustained impacts in all the MDGs, but is not the end goal in itself.

 

White text on a green banner calling on you to use ICT to address agriculture

CTA/ARDYIS Facebook Photo

Emerging leaders in ICT for agriculture, from African, Caribbean and Pacific (ACP) states, are calling for pro-youth policies to reduce youth unemployment. Although agriculture accounts for over 50 percent of the GNP of many ACP countries, youth involvement is very low while unemployment remains high.

The young agriculture and ICT leaders have called for “thoughtful, dynamic, multilevel and relevant policies” from governments and institutions across the block of countries to remedy the problem. They have put forward a series of recommendations that they believe will help to encourage more young people to work in agriculture. The recommendations range from curricula revisions to capacity building and financial aid, ICT proliferation to increasing the involvement of women and marginalized youth.

The group wants to see the dynamism of the agricultural sector reflected in curricula across all levels of education as well as emphasis on agri-business and technological integration. “The absence of agriculture from the curriculum, particularly at the compulsory levels of education in some ACP countries is untenable. Its broad-based and compulsory inclusion with the appropriate resources will help to motivate youth towards having a more favorable view of employment opportunities in the agricultural sector,” said ICT4D Researcher Tyrone Hall.

The requisite financial resources also need to be made available in the form of scholarships, grants, concessionary education and research loans to those under 35 who are interested in critical areas of agricultural and rural development such as agronomy, food science and technology, agricultural engineering and water management.

“The current university structure in most ACP countries favors the Arts and Social Sciences, sectors for which our economies are expanding too slowly to provide enough employment opportunities,” according to ICT developer Chris Mwangi.

Complementary capacity building is also necessary to get the most out of the sector, the group recommended. This will require training in good agricultural practices and agro-processing as well as developing ICT officer programs across the ACP group to assist young farmers master their trade. “Our collective experience shows that a critical mass of young people in ACP countries is interested in pursuing careers in the field of agriculture, but they are hamstrung by limited skills, knowledge and training opportunities. Resolving these intractable problems requires urgent attention… given the need to reduce food imports,” added Tyrone Hall.

Another recommendation is the creation of “a legible, collateral-free micro-credit environment that offers incentives tailored to the financial needs of young farmers, and ICT software developers who are focused on rural development and agriculture,” said Samantha Christie.

The establishment of regional ICT incubators over the next five years to develop contextual and efficient technological responses to agricultural problems is also critical.

Finally, the participants recommended the provision of legal structures to facilitate increased participation of the youth in ICT, particularly women, physically challenged and marginalized youth with the required skills and interest. “We forthrightly endorse the prioritization of these groups in land reform programs. We also urge ACP countries to meaningfully institutionalize youth involvement in agricultural policy making,” said the group.

We are energized and prepared to share our newly acquired and boosted skills in advanced web 2.0 tools and to support networking among youth involved in agriculture and rural development in our home countries,” said Maureen Agena.

 

When a large scale disaster strikes the world watches. Twitter gets flooded with reports, pictures and prayers. CNN, BBC, Sky News and Al Jazzera all break their regular programs to show us terrifying images of what is happening.

Thankfully only 2-3 large scale disasters strike every year. Depending on the magnitude and location of the disaster, the media and people loose interest within a few days or weeks. At the same time we have many medium scale disasters that happen around the world on almost a daily basis. If they strike US then we hear about them for a while, but if they happen in remote places of the world like Sri Lanka, Indonesia or Ghana then they at usually go un-noticed by most people. This is however usually not the case for the local media and the local population of the country affected.

In the last 2 years we have seen efforts being born around utilizing social media, social networks and digital volunteer groups to help deal with the explosion of information that we now get through mobile phones and social media. While these efforts are promising and do provide us with opportunities for gathering, processing, analyzing and disseminating information in ways we have not been able to do so far, then they do fall short in one important part and that is that they are not sustainable for the long-term and repeatable for the large number of disasters that occur every year.In my visits to disaster prone countries, where I have been speaking to them about the importance of preparedness, they all spoke of interest in all of these new technologies and efforts that have been getting so much attention in the press and at conferences around the world.

What they complain about is that nobody has reached out directly to them and shown them how they can make use of these tools. The reason is that we in the global humanitarian and technology community have been too focused on trying to figure out how to do things at a global scale that we have largely ignored the local perspective. Some might argue that the jet-setting trips of the leaders of the digital volunteer community to conferences around the world have been focusing on this effort, but I would like to argue that in most cases these have not necessarily resulted in more than short-term awareness building. Often these conferences have also been mainly attended by people who are not active in the disaster response community.One could also say that recent efforts of setting up crowd-maps following disasters in Pakistan, New Zealand and Japan, driven by local actors are samples of how things really work.

While I agree that great work has been done by those local actors, then I would also argue that much greater work could have been achieved if we had focused more on preparedness and building local capacity before these disasters struck. Then we could have ensured that the information gathered was actionable and relevant to the response. We could also have ensured that the response community was utilizing this new medium to the fullest.Over the last year we have put a lot of focus into building a global capacity to deal with crisis. We have established the Stand-by Volunteer Task Force, we have established connections with the global response community (UN, NGOs, Red Cross) and we have had great examples of how this effort can really provide information to the response community.A promising change to this was an effort lead by the US State Department that started last week in Indonesia under the name TechCamp Jakarta. There they brought together key people from the new technology community and some of the actors from the local response community. It was a great first step, but more is needed to follow up on this.

What we need to do is to put focus on building up local capacity in disaster prone countries, especially those in the developing world. We can then leverage the global capacity we have already built up to help support these local efforts when their capacity is overwhelmed. We can also leverage the technologies, processes and training we have already put together for these global efforts. So what is needed to build up that local capacity?

1) We need to bring together the various actors involved in disaster response in the country. This includes the government, the UN, the NGOs, etc. Often there may be existing forums that can be leveraged, but often these need to be extended to ensure inclusiveness of all the local actors.

2) We also need to bring in the local technology community. They are the ones who can help adapting the global solutions to the local needs. This includes members of the local open-source community, but also people from the private sector technology companies.

3) We also need to bring in the academic community. Students have in the past been the basis for any grass-root effort we have seen around crisis information management. Together these various actors from the different communities make up the local crisis information community.

4) We need to provide standardized & localized, on-line and in-person training to this community on how to utilize these technologies to achieve better information sharing during disasters.

5) We need to drive awareness of the potential of these efforts to the response community. Through that awareness building we can build the relationships needed between the volunteer community and the response community

6) We need to provide standardized yet flexible processes that the local community can utilize to ensure that their efforts are actually resulting in providing actionable and accurate information to the response community.

7) We need to work with the local mobile providers to establish short-codes for citizens to use for direct reporting into the systems.

8) We need to provide the local community with awareness building material (advertisements, banners, etc.) to build a volunteer community and to make citizens aware of short-codes.

9) We need to provide the local community with mentorship from the global community on establishing the community and running this effort.

10) We need to work with local web portals (newspaper, social networks, etc.) to get them to direct people towards the efforts of the local community instead of establishing their own.

11) We need to help the local community run simulation exercises where they can train their volunteers and first responders in utilizing the technologies.

12) We need funding from the donor community to help drive these efforts in 20 of the top disaster prone countries in the world.

In my discussions with the response community in Indonesia, then the recent TechCamp event generated an interest that we should leverage to pilot a local capacity building effort for one of the most disaster prone countries in the world. I know the interest within the response community is high and that the BNPB (Indonesia’s version of FEMA) would welcome better information sharing amongst the various responders. Big question is if we can leverage that interest to find donors who are willing to fund a crisis information management “revolution” one disaster prone country at a time.

A rich dynamic taking place within the telecom sector is the emerging of new, low-cost solutions more suitable for delivering cost-effective solutions to remote, low-density rural communities.  Studies have shown that there is considerable untapped demand in rural areas.  However, until just recently the cost of delivery relative potential revenues,  has limited carriers from making the needed investments to service those living in these rural communities.

Mongolia man talking on cell phone

Photo Credit- Mongolian Artist

USAID’s Last Mile Initiative (LMI) undertook a number of projects to explore the potential for identifying and exploring potential solutions.  One of these was the Mongolia LMI project.  The project was launched in mid-2005 with an initial Assessment that explored opportunities, including holding discussions with the government and  discussion private-sector firms interested in becoming involved.  Discussions were also held with the World Bank who at the time was exploring an initiative to support for a universal service program and to undertake some limited rural demonstration deployments.

During this early phase the most promising approach that surfaced was to form a partnership between the Khan Bank who has approximately 300 rural banks throughout Mongolia, and Incomnet, a local ISP with a satellite network providing connectivity to a growing number soum-center branches of the rural Khan Banks.  The preliminary focus was on leveraging this satellite investment by adding a community-wide extension through the deployment of community-WiFi networks, with voice services provided through a low cost Voice over Internet Protocol (VoIP) solution set.  In many ways this VoIP approach served as a forerunner to the now-emerging lower-cost commercial solutions entering the marketplace.

In late November-early December of 2006, the USAID-funded team returned to Mongolia to design a workable network using Incomnet’s satellite network and to develop a detailed project plan.  This design and project plan put forward an approach consisting of three key elements;

  1. the development of a detailed business-financial plan showing financial viability of rural access,
  2. the support of technical assistance for the deployment of wireless networks in four rural communities that would provide broadband and VoIP services off the back of Incomnet’s Dial@way satellite network, and
  3. a modest amount of risk capital required to install these four rural community  networks.

The project was executed from mid-2006 through mid-2008, with full operations beginning in mid-2007.

The implementation took place in four rural communities: 1) the Saikhan soum of the Bulgan aimag, 2) the Tsengel soum of Bayan-Ulgii aimag, 3) the Chuluut bridge of the Ondor-Ulaan soum in the Arkhangai aimag, and 4) the Tsagaannuur bagh of theTariat soum in the Arkhangai aimag.

The implementation focused predominately on providing voice services via satellite-WiFi-VoIP, with PSTN interconnection.  A final phase provided Internet access by placing a limited number of PCs within each of the four communities.  For the initial installation an estimated 20-30 WiFi phones were distributed across the rural communities, with more to be added based on local demand.

The Mongolia LMI provided a valuable test-bed of experience, rich with lessons in several key areas for application well beyond Mongolia, including;

  1. Even those living in the most remote areas are capable and willing to pay for telephony services,
  2. The satellite-WiFi-VoIP solution sets is a viable, low-cost approach for delivering voice services into these remote areas, with the added advantage that the network can also deliver broadband Internet access,
  3. The revenue from these rural communities is sufficient to pay for the network, its operations, and interconnection cost, making these profitable business ventures even without universal service funds,
  4. Maintaining these systems in harsh conditions is a significant challenge requiring constant attention, and
  5. The technical & business-financial model is replicable to additional rural communities throughout Mongolia as well as other countries.

The Mongolia LMI project also positioned Incomnet, through the capacity building gained through execution of this project, to aggressively pursue subsequent roll-out of yet additional rural communities being funded in part through the World Bank and the newly established universal service fund.

In many ways the experiences in Mongolia pushed the envelop of both technology and a viable business-financial model, with the conclusion being that there are viable solutions for both.  Fortunately there has been significant advancement in lower-cost technical solutions since this project was concluded, that provide even more stable and replicable rural solutions to meet the needs of rural Mongolia, as well as other remote rural communities.

Did Facebook really fuel the revolutions: (Photo credit: Harvester Solution)

On May 5th at American University, a group of international scholars and Internet governance policymakers engaged in informed dialogue on current Internet issues at the Giganet conference.

One panel entitled “Revolution 2.0” featured two Middle Eastern Internet experts from Egypt and Tunisia arguing that social media was an aid in helping citizens topple the dictatorships, not it’s catalyst.

Khaled Koubba of the Arab World Internet Institute in Tunisia shared his experience in the revolution where 20,000 cyberactivists and opponents of the regime gathered in front of the Ministry of Interior on January 14, 2011.

“It is true that we used the 2.0 tools but it is not for sure that [it was] the 2.0 revolution or the Facebook revolution,” he stated, “it has been made by people who fight for their dignity, for their life…”

He acknowledged the message reiterated in the press that Twitter and Facebook were used to mobilize people and share information; but pressed that these social media tools also helped citizen’s regain confidence in their liberties, freedoms, and abilities to make change.

“Even after Ben Ali left, we are continuing even today to put pressure on the government [in] many ways using the 2.0 tools to make change to attain what we want to attain,” Khaled asserted.

He cited two controversial videos, currently circulating on Facebook, of Farhat Rajh, Tunisia’s current interior minister, speaking about some very contentious issues of the ex-ruling party and the elections to be held on July 24.

Nivien Saleh, an Egyptian and professor of International Studies in Texas, echoed Khaled’s sentiments that technology does not necessarily liberate.

It is the people who liberate themselves from an authoritarian government onto democracy. Social media is only one of the communication avenues that drive the mass outlook.

She maintained alternate forms of communication, such as strategies for non-violent resistance through targeted outreach, coupled the latent feeling of dissatisfaction, are the real central pillars for a population to mobilize change.

Professor Shaleh also questioned the future role that Internet governance will take in regulating the content of social media

“What standard [do] providers of social media such as Facebook decide [in terms of] what kind of content can make it onto their media platforms and what cannot,” she wondered outloud to the crowd.

She referenced the Khaled Said group on Facebook, where the government asked Facebook to remove disturbing pictures of the deceased Alexandrian martyr posted by activists.

“Facebook forced the activists to take the pictures down, even though [they were there] in the first place to protest and show that stuff like this actually happens,” Shaleh said.

It is blazingly clear from these two Middle Eastern scholars that this was not a Facebook revolution, it was a citizen’s revolution and social media was merely a channel to funnel change.

Please view the video below of the Giganet conference’s panel “Revolution 2.0: the Internet and the Middle East and North Africa” and the panelists viewpoints on the role that social media played in the Middle East’s uprisings:

This report was released last week about the mobile money service M-Paisa in Afghanistan. It provides some intriguing insights on lending issues faced by Afghans and the mobile banking services rapidly emerging in their country.

The product branded M-Paisa in Afghanistan was initially piloted by local operator Rashon in collaboration with Vodafone, to provide microloan disbursement and repayments for MFIs as well as a person-to-person money transfers. According to the M-Paisa website they offer safe, reliable and fast access to a range of financial services including:

  • Person to person money transfer.
  • Disbursement and repayment of microfinance loans.
  • Airtime purchases.
  • Merchant payments.
  • Disbursement and receipt of salaries.

With low levels of fixed bank infrastructure and rising mobile penetration, it seemingly appears that the cheap and secure features prominent in mobile banking would lead to a rapid adoption of its services in Afghanistan.

However, Rashon soon found that they faced numerous consumer barriers central to the service’s overall adoption in Afghanistan. With a population of 30 million people, 36% of who live below the government defined poverty line and 74% of who are illiterate; Afghanistan is the poorest country in the world outside Africa.

Therefore, textual, mobile and financial illiteracy was one of the largest hurdles that the company had to overcome.  Since consumers could not use SMS to transfer funds, Roshan developed an Interactive Voice Response (IVR) system in three languages, English, Dari and Pashto.

Other issues that the authors concluded was a general distrust of financial institutions that go against the well established Hawala agent network, and a commonly established distrust of non-tangible assets.  There was also a common “chicken and the egg” problem of investing in a branchless banking agent network without an adequate amount of customers—and customers less willing to try out the service—without there being a strong agent network. The authors of the report stated:

But M-paisa is caught in the tricky position that faces all services requiring network dynamics—to succeed, they must educate and nurture both consumers and agents, neither of which has much incentive to jump in first without the other being around.

The authors of the report, Jan Chipcase and Panthea Lee, traveled to Afghanistan in August 2010 to four different cities to explore traditional money and emergent mobile money practices in Afghanistan.  While in the field they conducted in depth interviews of three potential mobile customers and one M-Paisa agent, their main goal being to contribute to the knowledge base of the mobile money community.

They sought to build on research such as Portfolios of the Poor, which highlighted the strategies the poorest members of societies use to manage their limited resources, as well as the sector-galvanizing discussions led by the World Bank’s consultative Group for the poor and the GSMA’s Mobile Money for the Unbanked initiative.

Throughout the author’s studies, they concluded that with the growth in mobile penetration, the trust in service providers is also beginning to surface. Brand recognition and trust in Roshan and other service providers has been gradually expanding. Concurrent with the evolution of cell phones being a staple in Western society, the authors believe that M-Paisa have a great opportunity to transform Afghan society.

Just as mobile telephony isn’t as much about the phone as it is about the conversation, mobile banking is not about the money—it’s about what the money can enable.

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