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Africa banks on cell phones

Millions to enter banking system through mobile phone system.

For the small towns and unreachable villages that have sent generations of talented youths and natural resources to the booming cities, this is an especially big deal. The technology should ease the path of remittances home, and make it easier for agriculturalists to operate multiple, far-apart farms.

Those lucky enough to procure a micro-loan will be able to receive payments without traveling for hours. Those hopeful enough to apply for a loan will be able to bring to the counter some evidence of their income, if only in text messages.

And in the capitals of each new country where mobile banking takes off, governments face the enticing option of taxing millions more petty purchases a day, in all the impractical corners where bureaucrats seldom go.

“As the cash-less society grows, the consequences are going to be pretty heavy,” said Ghana Manager Kofi Kufuor, of Afric Xpress, a company that helps Ghanaians pay their bills and transfer money via text messages. “This is a lot of money we are talking about.”

And a lot of people: “You have 6.1 billion people on this planet, out of which only one and half, two billion have an account,” said Prateek Shrivastava, head international strategist for Monitise. “Billions are going to be interested.”

Yet, out of those billions of people — whose infinitesimal transactions were once so extraneous to the world’s financial institutions — nobody stands to benefit quite like Africa's increasingly powerful telecom companies, the conglomerates who built this continent's cellular towers and enable its calls.

“These guys are going to be more powerful than Google, more powerful than Microsoft, within the locality in which they operate,” Amankwah said. “Already, telecoms move more money than the banks. And they have control over the channels — it's their sim card. You're using their network.

“These guys are going to be kings.”

More GlobalPost dispatches about African business:

Diamonds are forever?

Ghana weighs boosting tax on gold

Ghana's cell phone waste

http://www.globalpost.com/dispatch/ghana/090527/africa-looks-cell-phone-banking