Rahimullah, 6, Bibi Shahgul, 45, Massoma, 8, and Lima, 5 (l-r). Bibi Shahgul is a project participant of NRC's digital cash initiative in Maiwand district of Kandahar. She is now able to purchase the materials for her house using the e-card provided to her. Photo: Maisam Shafiey/NRC

Digital cash empowering rural communities in southern Afghanistan

Published 22. Feb 2024
An innovative digital cash project piloted by the Norwegian Refugee Council (NRC) in the Maiwand district of Kandahar province has successfully demonstrated a new and more secure way of providing humanitarian assistance while significantly enhancing the inclusion and resilience of rural populations.

“I’ve just used e-cash to buy beans, cooking oil, sweets, tea, sugar, matches, and salt. It’s so easy to use the card. It doesn’t wear out [like paper money], and it always works. We are delighted with the e-cash card,” said Mohammad Omar, a project participant in the e-cash pilot programme.

The NRC e-cash pilot aimed to address the many challenges faced by the most vulnerable rural communities affected by displacement in accessing affordable and safe financial services, especially following the collapse of the banking system in the country after the regime change in 2021.

"Our pilot demonstrates how e-cash can facilitate safe distribution of humanitarian aid to displaced and vulnerable communities, empowering them to safely acquire essential items like food and household supplies," said Aslam Khatti, NRC Afghanistan’s cash and markets specialist, who led the e-cash initiative. "However, this pilot marks merely the initial phase. We are in need of additional donor funding to scale up e-cash assistance and establish an extensive network of users and agents to support the value chain."

One female project participant, Bibi Shahgul, is amazed by the convenience of using the e-cash – especially since it eliminates the hassle of carrying or losing physical cash. “The card is so easy to use. My oldest son or I simply go to the market and purchase everything we need from the retailers without any problems,” she said.

NRC implemented the e-cash pilot from 1 October to 31 December 2023, in partnership with Hesab Pay, an electronic financial service provider that offers a secure and convenient e-wallet service. NRC provided financial assistance totalling USD 170 monthly to 110 vulnerable households in the Maiwand district, including women, people with disabilities, and elderly-headed households. After the e-cash pilot, 98 per cent of the surveyed individuals attested to the ease and promptness of utilising e-cash.

In 2024, NRC hopes to implement the e-cash solution to more areas and sectors in Afghanistan, as part of its humanitarian and development interventions. NRC recognises the potential benefits brought by e-cash platforms, supporting market growth and humanitarian cash work, especially in crisis and displacement situations.

Notes to editors:

  • An e-cash explainer, including lessons learned and recommendations for donors is available here.
  • The pilot project demonstrated the market potential and operational feasibility of expanding e-cash services to rural areas, where formal banking services are scarce and unreliable.
  • NRC provided digital cash assistance of USD 170 per month for a three-month period to 110 vulnerable households affected by displacement. The assistance specifically targeted marginalized groups, including women, people with disabilities, and families headed by children or older adults.
  • NRC’s project participants benefit from the digital cash solution in several ways. They learn how to use digital accounts and e-cash systems, which improves their digital literacy skills. They can also use the e-wallets for saving, as there is no time limitation by which the cash must be withdrawn.  Moreover, the e-wallet is safe and secure, and the cash is stored in the permanent e-cash account.
  • The digital cash solution makes cash transactions easier for retailers and wholesalers, especially for rural ones who benefit from reduced travel time to get the stock. The business owners gain more confidence, access, and reputation to do business with national market actors. They can also earn extra income by acting as agents for local financial transactions.
  • The E-Financial Service Providers (E-FSPs) benefit from partnering with NGOs in several ways. They can get new customers who are introduced to the e-cash systems by the NGOs. They can also get support from NGOs in educating and activating the customers to use the e-cash systems effectively. Moreover, they can reach the last mile customers in remote areas, where the NGOs have access and presence.
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  • B-roll is available for free use.

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