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Showing posts from March, 2008

Banking on the phone

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In many so called Third World countries, informal businesses thrive. Hernando De Soto and his team note in The Mystery of Capital: Why Capitalism Thrives in the West and Fails Everywhere Else that an estimated four billion people across the globe operate within the extralegal sector. Most researchers, including De Soto, have shown that this sector contributes significantly to Third World GNP yet the sector exists outside the law and is generally beyond the reach of banks. In the numbers game, where banks have failed dismally, mobile telephone operators have flourished. Annual increase in mobile phone uptake in developing countries and former Communist states have consistently exceeded projections. According to the International Telecommunications Union , of the 1.2 billion mobile phone users worldwide, 45% live in developing countries - a natural habitat of the extralegal. New and improved specifications such as Mobile Information Device Profile (MIDP) and Connected Limited Devi