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.

As the book rolls off the press and nears publication date (Feb. 2), an early proof has garnered early reviews.

Library Journal (no access without subscription):

“This book offers valuable insights about the use of cell phones and technology-based investments to generate wealth and demonstrates that entrepreneurship may be more fruitful than aid. This valuable work can be effectively integrated into public administration, global business, and human resource academic courses.”

Caroline Geck, Kean Univ. Lib., Union, NJ

Next Billion.net (by Rob Katz)

“…This a history of sorts, about how Iqbal Quadir came to launch GrameenPhone.  Sullivan doesn’t claim to offer new or different strategies to engage BOP [bottom of the pyramid] markets; he simply sets out to tell the tale of an expat Bengali and his innovative phone company.  You Can Hear Me Now is well-written and very engaging, as the author enjoyed good access to some of the stories’ major players.  A smart manager can learn from GrameenPhone without being led by the hand, and Sullivan’s storytelling and analysis open up the case in a way that we haven’t before seen.  The book’s out next month; in the mean time, check out his blog.”

World Bank: Private Sector Development blog (by Christine Bowers)

“…the first half of this book tells the GrameenPhone story, the second is a grab-bag of other technology initiatives, including many players in the m-banking world. If the Nobel Prize win peaked your interest in all things Grameen, buy a copy when it comes out next month. In general, I’m not too sure that a book is the best format for telling these stories – hard to give substantive coverage to a field that moves so quickly in time. Fortunately, Nick also has a blog.”

Thanks to all for their interest and attention.

One of the key themes of You Can Hear Me Now is that private investment is a better route to poverty eradication than World Bank loans and programs. A new report from the World Bank reaches that same conclusion, as reported in today’s Washington Post.com. Private investment that sparks indigenous entrepreneurship which in turn leads to creation of millions of rural income opportunities is by and large a better way to drive GDP growth than loans to govenments that don’t effectively deploy the funds or distribute the money.

The Bank’s Independent Evaluation Group looked at 25 countries into which the World Bank had poured nearly $10 billion between 2001 and 2005.

“Achievement of sustained increases in per capita income, essential for poverty reduction, continues to elude a considerable number of countries,” the report declared, singling out as particularly ineffective programs aimed at the rural poor. Roughly half of such efforts from 2001 to 2005 “did not lead to satisfactory results.”

Overall, since 1990, the incidence of people living on less than $1 a day has dropped from 28% of the world’s population to 19%. But most of that drop has occured in China, which has experienced the fastest rate of economic growth in human history–and taken virtually no World Bank money. Do you see a pattern here?

What if that $10 billion had been privately invested in local businesses that were productively using the money? Peter Goodman, who wrote the article, concludes:

“Some of the report reads like an amalgam of the sorts of criticisms that have been leveled against the World Bank for years by activists who accuse it of an ideological bias toward market reforms and a callous disregard for the people bearing the brunt of such policies. The report chides the bank for failing to help cushion poor people against price and currency liberalizations; for focusing on the fiscal sustainability of pension systems to the deriment of the poor; for promoting the privatization of power industries without thinking enough about wiring up the indigent.”

The World Bank calls the report “overly bleak.”