DUSHANBE, July 22, 2014, Asia-Plus -- The European Bank for Reconstruction and Development (EBRD) is supporting the central bank of Tajikistan in creating a regulatory framework for mobile financial services in Tajikistan, which was launched as a pilot project in Dushanbe on July 21.

According to press release issued by the EBRD, regulators and representatives from local financial institutions and IFIs presented and discussed business plans for the rollout of mobile services in the country.  This new framework allows banks to use innovative technologies and existing retail infrastructure to expand their services and footprint outside of traditional bank branches. It will also enable the provision of innovative mobile payments services by non-banks in Tajikistan.

Mobile financial services are revolutionizing the way millions of people around the world manage their finances and are significantly expanding the reach of the traditional branch-based banking model.  Financial services now offered through agents and mobile devices include core financial services (account opening, deposits/withdrawals, loans, insurance) and payment services (remittances, bill payments, merchant payments).

“The advance of this new technology has the potential to enable the financial inclusion of millions of Tajik people. Thanks to the project, Tajikistan now has the regulatory framework and know how required for a vibrant mobile money market which will help bring financial services to its unbanked population”, said Sibel Beadle, Senior Banker at the EBRD.

While advanced services like mobile money are commonplace in certain parts of the world, the EBRD has been working to unlock its potential in less developed markets.  A market study, funded by Luxembourg, previously identified a number of EBRD countries such as Tajikistan, Azerbaijan, Kyrgyz Republic and Romania as markets that were ready for the introduction of mobile money services, but lacked the regulation and know-how for this to take place successfully.

In Tajikistan the Bank pursued a year-long EBRD technical cooperation project, funded by the French Finance Ministry, which created draft laws and regulation for both agent banking and mobile payments.  As part of the project, a review of the country’s financial sector and telecommunications industry was carried out and the ability of both financial institutions and mobile operators to provide mobile financial services was assessed.