AFRICA: MOBILE BANKINGBanks get a bad press these days, what with their profiteering and their rotten charges. But image a world without them. You'd have to keep your money under your mattress. You couldn't borrow against your income. You'd need cash for every transaction.

The absence of a banking sector is not just inconvenient it is potentially crippling to an economy.

So, at least, argues a growing number of developing economists who view Africa's poor banking infrastructure as one of the key reasons for that particular continent being held back.

Those same economists are now tingling with excitement at a potential solution: "mobile banking".

Over the past year, there has been a proliferation of joint-ventures across Africa between mobile phone operators and commercial banks with a view to bringing millions of people - often living in rural areas and cut off from basic services - into the mainstream economy.

"The idea is to use what's there - the existing phone infrastructure - as a means of reaching people," says Jennifer Hoffmann, a South African mobile banking consultant. "The telecoms infrastructure can serve remote areas where the value of transactions are low, which is usually the case in Africa."

For banks, the growth potential is massive. It is estimated that only 20 per cent of families in Africa have bank accounts. But mobile phone ownership is almost universal in some African states.

Across the developing world as a whole, more than 800 million mobile phones were sold over the past three years. On a note of caution, Ms Hoffmann says "it took 10 years for ATMs to take off" and she predicts a similar lead-in time for m-banking. When African mobile giant MTN launched a pilot m-banking service in South Africa two years ago "they had an idea there would be a massive take off. That didn't happen," she says. "It was very slow to start with."

Like many others, however, she sees great scope for expansion.

Earlier this year, Kenya's biggest mobile phone operator offered subscribers a new service whereby they could send cash to other phone users by SMS. The m-payments system has already attracted 1 million customers in Kenya. Mobile banking in the country now accounts for an estimated 25 per cent of Kenya's total banking customer base.

FinMark Trust, a Johannesburg-based economics unit which is promoting mobile banking as a means of aiding development in Africa, says a perception that such banking is expensive and complicated is restricting growth in the area.

Mobile users are also concerned about the security of transactions by SMS.

Ms Hoffmann says the latter needs to be monitored closely but "so far there have been no reports of fraudulent stories. The feeling is that m-banking is no less safe than using an ATM". She adds m-banking transaction costs tend to be lower than ordinary bank charges except for "when you hit the real world" and seek to withdraw cash from your account.

It is at this point some scandalously high bank charges kick, with customers in South Africa, for example, forced to pay the equivalent of E1 in ATM charges for each cash withdrawal, irrespective of size. Until such charges are reduced, the reality of Africa's finances will continue to keep people away from banking, mobile or otherwise.