From Balancing Act MOBILE PHONES REVOLUTIONIZE AFRICAN BANKING Mobile phone banking is expanding across the region from South Africa to Kenya and is putting the poor directly in control of their own finances like never before. In Africa, traditional banking is not a viable option for many of the poor and those living in rural areas. High fees, low education and literacy, as well as long distances between banking facilities get in the way of simple transactions. According to the Consultative Group to Assist the Poor (CGAP), an estimated 80 percent of those living in the United Nations-designated least developed countries (LDCs) are unbanked. However, technologies like mobile phone banking are contributing to overcoming these constraints. Only 1 billion of the world`s 6.5 billion people have bank accounts, according to CGAP, yet about 3 billion have mobile phones. CGAP figures these new technologies will open the door to more than 2 billion people worldwide who currently do not have access to banking services. Thanks to a $26 million partnership with the Bill and Melinda Gates Foundation launched in February, CGAP hopes to discover how to best use technology to deliver banking services to the poor around the world and "make it possible for people anywhere, anytime, to have access to all kinds of financial services," says Elizabeth Littlefield, chief executive officer of CGAP. "Poor people are very willing to use mobile phones as a basis for moving money around. In places like the Congo, mobile phones are used to transfer money around the country, circumventing the banking system as well as the more traditional money transfer," she said. According to Gautam Ivatury, a microfinance specialist and manager of the CGAP technology program, in the Democratic Republic of the Congo alone, there are an estimated 3 million mobile phones yet only 20,000 bank accounts, indicating a huge potential for mobile banking. The bottleneck in delivering microfinance services such as savings accounts, money transfers, and loans to the poor has been the cost of "making tiny little transactions" in sometimes rural areas using traditional banking practices. Yet mobile phones and other technology can cut the cost of such transactions and make widespread microfinance economically feasible. (SOURCE: AGOP)