One of the big raps against mobile banking is that it will unleash a wave of cross-border terrorism funding and criminal money laundering, because the practice is so unregulated.  It’s a major concern that regulators are beinning to come to grips with.

But what if mobile banking might actually reduce AML and terrorism funding. How m-banking can reduce money laundering (Business Daily, May 27), by Matt Herbert of The Fletcher School, suggests that might be possible:

In the epicenter of global m-banking today(Kenya), the M-Banking 2009: Balancing Regulation and Innovation conference in Nairobi was a landmark event–bringing together bankers, telecoms and Central Bankers to hash out the issues and resolve the tensions between them. The protagonist was/is Safaricom’s  M-PESA money-transfer-by-mobile phone, which has caught bankers flat-footed.

From hotel porters to members of Parliament, everyone is using M-PESA, to send money home to villages, pay bills and tuition–and store money in their phone.  Even in Kibera, the largest slum in Africa with 1 million people living without electicity or sewage, M-PESA is being used by local savings groups to mobilize money.  Some groups have used their meager savings to invest on the stock market–in M-PESA.

Organized largely by students at The Fletcher School (Center for Emerging Markets Enterprises) and co-sponsored by the Kenya School of Monetary Studies, with lead support from Kenya’s Equity Bank, the conference provided a forum for the Central Bank of Kenya to address simmering tensions between the banking community and Safaricom, whose M PESA mobile-money transfer system is spreading like wildfire. With more than 6 million M-PESA accounts, more people in Kenya are transferring money by mobile phone than have bank accounts.

High-level Kenyan dignitaries included the Governnor of the National Bank, the Vice President of Kenya, and the Ministers of Finance and Communications. Attendees included the Central Banks of Uganda, Tanzania, and Rwanda, numerous commerical banks, Safaricom,  and interested parties primarily from Africa and Europe, butalso including World Bank’s CGAP and Bankable Frontiers from the U.S. The presentations and debate were high-level and high-spirited.

The week of the conference,  Business Daily Africa ran a 12-page spread representing numerous points of view; during and after the conference, local TV and print media ran multiple stories.

More updates to follow…I’m going to predict, there’s something happening here.

The political crisis in Bangladesh is worsening, with the country in a “state of emergency” and the head of the caretaker government having stepped down. (See “Bricks, sticks and bullets” from Jan. 8th.) It now seems that elections scheduled for Jan. 22 may not take place. Textile exporters, one of the country’s biggest industries, have noted a huge drop in orders. New foreign investors are holding back. Telenor, the biggest existing foreign investor, is sitting pretty. Cell phone companies thrive in times like these.

The crisis is not new, and not complex, and has roots going back 30 years. It’s the tale of two women who hate each other (probably with good reason). Here’s a great AP story that clearly describes the subtext to the chaos in the streets of Dhaka.

Nobel Peace Prize winner Muhammad Yunus gave a great speech (Yunus spells out nation’s rosy future)  in Feb. 2006 citing the need for new blood in Bangaldeshi politics. He was right.

The Ministry of Information and Industry reported that China had 443 million subscribers at the end of September ‘06, and is adding more than 5 million subscribers a month. This gives China close to 1 in 5 cellphone subscribers worldwide.

Similarly, about 1 in 5 Skype users now come from China, despite the government’s ban on use of Skype Out to connect from a PC to the regular phone network.