Indonesian Government to Establish New Shariah Bank

Jakarta Globe, May 19, 2013

A banner advertising a mortgage product from the Shariah unit of state-owned
 Bank Tabungan Negara is displayed in the 2nd Shariah Economy Festival in
 Jakarta in this Feb. 2009 file photo. (JG Photo/Yudhi Sukma Wijaya)

State-Owned Enterprises Minister Dahlan Iskan on Sunday revealed that the government is planning to establish a Shariah-compliant bank in order to manage Rp 40 trillion ($4 billion) worth of Indonesian hajj funds.

Dahlan said the establishment of the bank will support the implementation of a new policy issued by the Ministry of Religious Affairs obliging hajj funds to be managed exclusively by Shariah banks.

The government has stakes in four lenders — Bank Mandiri, Bank Rakyat Indonesia, Bank Negara Indonesia and Bank Negara — that run their own Shariah units. None of these banks, however, focus solely on Shariah banking.

Dahlan said the government wants to support the development of Shariah banking in Indonesia with the new bank since the sector controls only 4.9 percent of market shares in Indonesia’s banking industry, according to first quarter data from Bank Indonesia.

“Shariah banks in Indonesia command … only a seventh of the assets that Malaysian Shariah banks [do],” Dahlan told Indonesian news portal republika.co.id.

Indonesia’s Shariah-compliant banks controlled a total of Rp 214.5 trillion in the first quarter of 2013, a 37.8 percent increase compared with the same period last year. The hajj funds are expected to help boost this figure.

Bank Indonesia is targeting a 58 percent increase in banking assets this year that comply with Islam’s ban on interest.

Indonesia Court Ruling Boosts Indigenous Land Rights

Jakarta Globe – AFP, May 17, 2013

This file aerial photograph taken on June 7, 2012 shows lush tropical forest
in Central Kalimantan (AFP Photo/Romeo Gacad)

An Indonesian court has ruled indigenous people have the right to manage forests where they live, a move which supporters said prevents the government from handing over community-run land to businesses.

Disputes between indigenous groups and companies have become increasingly tense in recent years, as soaring global demand for commodities like palm oil has seen plantations encroach on forests.

In Thursday’s ruling, Constitutional Court judges said that a 1999 law should be changed so it no longer defines forest that has been inhabited by indigenous groups for generations as “state forest,” according to court documents.

“Indigenous Indonesians have the right to log their forests and cultivate the land for their personal needs, and the needs of their families,” judge Muhammad Alim said as he handed down the ruling, state news agency Antara reported.

While environmentalists welcomed the ruling, they warned it could unintentionally lead to an upsurge in disputes between authorities and communities over the classification of indigenous land.

In March, seven villagers were shot and at least 15 police officers were injured in North Sumatra, where a dispute over a forest claimed by both the community and government has been simmering since 1998.

The National People’s Indigenous Organization filed the challenge to the 1999 law, which they say has let officials sell permits allowing palm oil, paper, mining and timber companies to exploit their land.

The group said Friday’s ruling affected 40 million hectare of forest — slightly larger than Japan, and 30 percent of Indonesia’s forest coverage.

They said this area was legally classified as “customary forest,” the term that describes forests that have been inhabited by indigenous people for a long time.

“About 40 million indigenous people are now the rightful owners of our customary forests,” said the group’s chief Abdon Nababan.

However, a senior forestry minister official said he believed the total amount of “customary forest” was far lower, and stressed it could take time to implement the changes as local governments would all need to issue a decree.

Stepi Hakim, Indonesia director of the Clinton Climate Initiative, said the ruling would give legal grounds for indigenous communities to challenge businesses operating in their forests, but this could lead to a string of new disputes.

“As soon as this policy is delivered, local governments have to be ready to mitigate conflicts,” he said.

Indigenous groups are commonly defined as those that retain economic, social and cultural characteristics that are different from those of the wider societies in which they live.

Agence France-Presse

Related Article:

Editorial: Court Ruling Will Help Preserve Indonesia’s Forests

More Than a Million Support Petition to Stop Aceh Deforestation

More Than a Million Support Petition to Stop Aceh Deforestation

Jakarta Globe, May 18, 2013

An aerial view of burning peatland in Rawa Tripa in Aceh is seen in this
handout photo taken March 27, 2012. (Reuters Photo)

More than a million people across the globe have signed an online petition demanding the Indonesian government to cancel the plan to open the protected virgin rainforest in Aceh to commercial exploitation.

Arief Aziz, the communications director for the online petition website Change.org, said in a statement on Saturday that the “#SaveAceh” campaign has been signed by more than 20,000 Indonesians since its launch in March.

Following the massive reaction, Rudi Putra, an environmental activist, started another petition for the same cause on Avaaz.org, which has garnered more than 1.2 million signatures in its first 11 days.

“Aceh rainforests, home to endangered animals like orangutan and Sumatran rhino, have been destroyed by illegal hunters and loggers, but this new exploration will be an ultimate disaster,” he said.

Rights groups say the plan will allow around 1.2 million hectares that were previously protected to be cleared.

Approval of the plan would open up the forest on the northern tip of Sumatra to mining, paper and palm oil plantations.

The Aceh government banned the granting of new logging permits six years ago to protect the forest, but a new administration that came in last year is in favor of allowing logging again.

“Yudhoyono has the options: to leave an important legacy to protect the rich natural resources or to trash his own track record by allowing this disaster,” Avaaz’ campaign director Ian Baasin said.

Jakarta has signaled it will sign off on Aceh’s plan in the coming weeks, even as it is expected to extend the moratorium on new logging permits which expires on Monday and has been in force for two years.

There is also strong support in the Aceh parliament which has the final say, and officials say they hope it will pass soon.

Although it seems to fly in the face of the national moratorium, the project is possible because it hinges on Aceh’s decision to overturn its own deforestation ban which was introduced at the local level six years ago.

The ban, stronger than the national measure, was brought in by the previous local administration — but it will be scrapped under the plan.

JG & AFP

Singapore Boosts Measures Against Global Tax Cheats

Jakarta Globe, Agence France-Presse, May 14, 2013

The central business district of Singapore seen on Tuesday, May 14, 2013.
(Bloomberg Photo/Munshi Ahmed)

Singapore. Singapore said Tuesday it will implement new measures that will make it easier to share information with other countries on cross-border tax evaders trying to hide assets in the city-state.

The move comes as the United States and developed countries in Europe intensify efforts to ferret out citizens who avoid paying taxes by parking their money in offshore financial centers like Singapore.

Officials said Singapore plans to reach an agreement with the United States that will enable financial institutions to comply with a US law requiring them to share information on Americans’ overseas accounts.

It also aims to amend its laws so that the Inland Revenue Authority of Singapore (IRAS) will no longer need a court order to get information from banks on accounts of suspected tax dodgers at the request of a foreign government.

From July 1 it will be a criminal offence in Singapore to handle proceeds from tax evasion.

“There no conflict between high standards of financial integrity and keeping our strengths as a financial center for managing wealth,” Finance Minister Tharman Shanmugaratnam said in a statement.

“Singapore will continue to be a vibrant wealth management center, with laws and rules that safeguard legitimate funds and reject tainted money.”

The joint statement by the finance ministry, central bank and IRAS said Singapore had already been able to respond promptly to most requests for information from foreign governments.

But removing the requirement of a court order will “further streamline” the exchange of information, it said.

Singapore will also sign an international convention on mutual assistance in tax matters and increase the number of countries with which it is able to exchange information for tax purposes from 41 to 83, including the United States.

The statement said the necessary legal changes would be made this year.

French authorities recently said they would seek Singapore’s help with an international probe into suspected tax fraud by a former budget minister.

Jerome Cahuzac stepped down in March after prosecutors announced there would be a full criminal inquiry into allegations that he had an undeclared bank account in Switzerland.

The 60-year-old is also suspected of moving assets to Singapore to hide them from the tax authorities.

Assets managed by fund managers in Singapore stood at Sg$1.34 trillion ($1.05 trillion) as of 2011, with over 70 percent coming from overseas, according to central bank data.

Agence France-Presse

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Indonesian Poor to Receive Rp 14 Trillion in Aid Ahead of Fuel Hike

Jakarta Globe, Ezra Sihite, May 13, 2013

A street vendor sells fuel in a plastic containers in Samarinda,

 East Kalimantan on March 24, 2013. (Reuters Photo)

The Indonesian government is poised to distribute up to Rp 14 trillion ($1.4 billion) in aid to the poor ahead of the central government’s planned fuel price hike.

The central government is trying to ween Indonesian motorists off the nation’s costly fuel subsidies — which cost the state some Rp 211.9 trillion in 2012 and heavily favor middle class drivers. President Susilo Bambang Yudhoyono has issued instructions which require the government to simultaneously slash fuel subsidies and increase welfare spending.

This round of payouts will reach some 15.5 million households living on less than $2 a day, Coordinating Minister of Welfare Agung Laksono said. Additional spending in the form of school aid and subsidized rice will be handed out as the fuel subsidy cuts take effect, Agung explained.

The coordinating minister said the government must spend some of the savings on the nation’s poor.

“The potential budget savings [from subsidy cuts] is up to Rp 37 trillion,” he said. “It must be returned to the poor people through compensation programs and also infrastructure development.”

Previous efforts to raise the price of subsidized fuel sparked days of chaotic protests. The plan was scuttled by Golkar Party and Prosperous Justice Party (PKS) factions in the House as protests peaked in Jakarta.

Critics of the plan argue that higher fuel prices will hurt the poor by causing food prices to rise. But the government spends more on energy subsidies than it spends on either education or health care.

The government has floated raising the price of premium subsidized fuel from Rp 4,500 per liter to Rp 6,000. The price hike is expected to take effect next month.

Lion Air Accused of Extortion

Jakarta Globe, SP/Robertus Wardi, May 11, 2013.

A Lion Air airplane takes off at Soekarno-Hatta airport in Jakarta, in this
file picture taken March 18, 2013. (Reuters Photo/Beawiharta/Files)

Indonesian airline Lion Air has been accused of extorting one of its Saudi Arabian business partners.

“Our client [invested] $18 million with Lion Air,” Guntur P. Daulay, businessman Miski Omar Hassan’s lawyer, said at a press conference on Saturday.

“Because our client maintained that there was no transparent business report delivered by [Lion Air’s] management, our client demanded that he get his money back. However, because the [the airline] couldn’t afford to return the funds, Lion Air owner Rusdi Kirana put up $1.5 million of his own money.

“Later, though, the money that was lent [by Rusdi] was said to have been embezzled by our client,” Guntur continued.

Omar was summoned by the Jakarta Police office on May 6 after missing two previous summons.

“Our client was unaware of the two previous summons because he was abroad at the time,” Guntur said. “Then, on May 6, he was detained.”

On May 7, a representative with Lion Air requested that Omar pay back the $1.5 million debt to settle the conflict. The company also asked Omar to give up his assets and his apartment if he could not afford to return the sum.

Omar, however, refused to pay, and Guntur maintained that Lion Air is guilty of extorting his client.

Edward Sirait, the general affairs director of Lion Air, denied the accusation.

Edward claimed that Omar is a travel agent who paid Lion Air a deposit to sell the airline’s tickets. He also questioned how Omar could think that he would receive a 100 percent return on his earlier investment.

Additionally, he said that Omar should handle the matter of the investment separately from the Rusdi Kirana loan.

“If it is related to business, there has been an agreement between both parties. We’re open to talking about the tickets and other [business related] matters. But the $1.5 million is a different thing.”

Furthermore, Edward accused Omar of running away after receiving the money.

“He had no intention of returning the money … that’s why we reported him to the police.”

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HMRC in offshore tax evasion crackdown after receiving fresh data

Biggest tranche of information ever received by HMRC contains 400GB of information on offshore tax evasion

guardian.co.uk, Press Association,  Thursday 9 May 2013

The Cook Islands, a dream holiday destination for some, a tax haven for
others. Photograph: Alamy

A fresh crackdown on offshore tax evasion has been launched after HM Revenue and Customs said it had received data showing extensive use of schemes to hide assets.

HMRC is working with the United States and Australia to analyse 400GB of data showing the use of tax evasion schemes via companies and trusts in territories around the world including Singapore, the British Virgin Islands, the Cayman Islands and the Cook Islands.

It is understood to be the biggest tranche of information ever received by HMRC about offshore tax evasion and has so far identified more than 100 people who are benefiting from these tax evasion schemes, with a number of individuals already being investigated.

HMRC has also identified more than 200 UK accountants, lawyers and other professional advisers who advise on setting up these structures who will also be scrutinised.

It is calling on anyone using offshore tax schemes to seek advice to ensure they are not breaking the law, which can result in criminal prosecution, hefty fines and possible naming and shaming.

The chancellor, George Osborne, said: "The message is simple: if you evade tax, we're coming after you.

"The government has invested hundreds of millions of pounds to fund the fight against tax evasion, both at home and abroad. This data is another weapon in HMRC's arsenal."

The Association of Chartered Certified Accountants said while it welcomed moves to clamp down on tax evasion, "we should never lose sight of the fact that it is a small number of people who are evading tax in these markets".

Chas Roy-Chowdhury, head of taxation at ACCA, said: "The majority of accountants, lawyers and other professional advisers, as well as their clients, are not breaking any laws in these locations.

"There is a large gulf between what amounts to tax avoidance, which is within the law, and tax evasion, which is illegal."

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World Bank Whistle-Blower: “Precious Metals to Serve as an Underpinning for Paper Currencies"

Silver Doctors, 7 May 2013

I had the opportunity yesterday to speak with one of the western world’s most courageous and astute women, Karen Hudes, Former Senior Counsel to the World Bank—now turned whistle-blower.

It was a powerful conversation, as Karen spent 20 years with the World Bank as an attorney and economist, before being “let-go” after reporting internal fraud and corruption.

During the interview Karen indicated that the world is rapidly changing, with western power structures breaking down, economic & political influence gravitating to BRICs nations, all amid a pending currency transition which will highly favor precious metals.   Hudes stated: “All of the countries of the world are going to allow precious metals to serve as currency, and this will be an underpinning for paper currency, as we’ll have both systems at the same time.”

From Tekoa Da Silva:

Starting out by discussing the shocking centralized power she witnessed while working at the World Bank, Karen explained that, “A study done by three [Swiss] systems analysts who used mathematical modeling [shows] how the [world's] 43,000 transnational corporations were being controlled through interlocking corporate directorates. There’s a group of 147 companies, most of them are financial institutions, and what they’ve done, is through the interlocking directorates, they control 40% of the net worth of these [43k] companies, and 60% of their earnings…so that group has been using the presidency of the World Bank as kind of a puppet to dominate the world—that’s [now] finished.”

A major shock to that centralized power base, according to Karen, was the recent move by BRICs nations leaders to bypass the World Bank for their financing needs, by establishing their own development bank. “As the BRICs [nations] economic power grows,” she explained, “they’re not going to be strangled anymore through the grabbing [of] their resources…So their decision to start their own development bank was their way of letting [world] governments know…that its time to end this corruption.”

Major moves toward monetary independence are also being made by growing numbers of U.S. states, Karen added. She explained that, “The states are starting to have legislation recognizing gold and silver bullion as legal currency. This is [also] a very strong signal the states are sending to the federal government, that the time to get serious about ending the corruption in the financial system is now here.”

When asked her thoughts on what this all means for the world monetary system, Karen said, “What’s going to happen, is we’re going to have all the countries of the world, sit down and figure out what’s going to be the best, most orderly transition from the current system that we have, [which has] profound imbalance and unsustainable deficits…[this change] is going to happen as each country makes its preference known, because the system we have now is not transparent, and the biggest change [in the new system], is that there’s going to be transparency.”

That transparency may be found through a gold-backed currency system, Karen noted, as, “All of the countries of the world are going to allow precious metals to serve as currency, and this will be an underpinning for paper currency, [as] we’ll have both systems at the same time. This is my guess, as I mentioned—I am an economist.”

As a final comment speaking towards her difficult journey as a World Bank whistle-blower, Karen said, “I’ve been struggling now for years, to tell the American public what’s [been] going on. I haven’t gotten through, because this [financial] group has bought up the press and has been spreading disinformation systematically. That undermines the whole point of a democracy. How can voters vote without an informed opinion, without the information that they’re entitled too? So this strangle-hold on information is going to end in very short order.”

——

This was a powerful interview conducted with a great American patriot and honorable world citizen. Karen is setting an example for the history books, and her interview is required listening for global thinkers and market students.

To listen to the interview, left click the following link and/or right click and “save target as” or “save link as” to to your desktop:

>>Interview with Karen Hudes (MP3)

To learn more about Karen and support her work, visit: Kahudes.net

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Archangel Michael on the World’s Movement into the Golden Age, March 24, 2013 – Part 2/2

“… GW: Shifting to events that are taking place in Europe at this point in time, it seems that the events in Europe are reaching or about to hit a breaking point of some kind. Several leaders, including Nigel Farage and allegedly Russian Prime Minister Medvedev have suggested that people should be removing their money from their accounts as the cabal may attempt a last ditch grab for money.

Now, I know, and perhaps many know, that the current system is corrupt and that there will have to be a degree of change in the current system before people will be willing to embrace the new system.

I don’t wish this question to sound alarmist to people, but is what is happening now one of the final, if not the final, straw that will help expose the banking cabal and allow the new system to be implemented? Is this new system ready? Or is it already being implemented? Or is it still only limited to preparatory work?

AAM: No, it is already underway. It is already being implemented. And yes, we do not wish to sound alarmist either, and so we also wish people to know that their resources, what they think of as their money, for those who have saved and put their faith in banking systems, they will be protected to a certain extent. So do not think that you have need to run out and remove all your monies, or that it will be completely gone. But yes, this is the beginning of a transition.

The expression of the lack of faith in particularly the European banking system causes enormous disruption, more significant perhaps than anywhere else. And so yes, it does have a domino effect, but it is not one simply shutting down [the old system] and a new system emerging. It is coming into balance with the new emerging as the old simply fades away.

Is it a last ditch effort on the part of those who have clung to the old paradigm of the 3rd, what you call the cabal? Yes, it is. But it matters not, because it is not going to work for them. Seldom are things such as this situation so black and white. There is always room for free choice and free movement and adjustment.

But in this situation it is simply evolution and expansion. And the expansion of the new, of the new paradigm, of what you think of as Fifth-Dimensional financial systems does not allow for systems that are based on greed and theft and control — and unfairness, basic unfairness, usury.

So, it is rather clearly defined. You have an expression that you use on Earth, “Out with the old.” And this is one of those situations where it is, in fact, the truth.

GW: Okay. So, along the lines of the leadership, or at least some of the leadership of what’s taking place in the financial sector globally, it has been reported that the apartment of the IMF managing director Christine Lagarde was raided last week.

Was this an attempt to expose her as part of the banking cabal, or was it an attempt to stop her from fulfilling the reforms that she is allegedly trying to bring to the international banking system?

AAM: It was an attempt to gather information and perhaps even destroy documentation that she is trying to bring forth for the reform of the financial situation. It was an unsuccessful raid.

GW: Okay. So what I’m hearing in your answer, then, is that Christine Lagarde is working for, I guess, the forces of light to bring the greater change to the IMF. Am I correct?

AAM: Yes. This one has had a real turn-around. No, we do not ever categorize individuals or groups or people as light or dark. But this one has truly committed herself to reformation.

She sees and she has the experience very clearly of knowing what does not work. And therefore she has committed her mission, her purpose to this reformation.

GW: Okay. And could the same be said about the new US Secretary of the Treasury Jack Lew? Is he on board with all the changes and working for the reformation as well with Lagarde?

AAM: He is an agent and an angel of change. He could not be simply on board. He is a moving force. ‘…‘’

"The U in Kundalini"- Oct 18, 2012 (Kryon channeled by Lee Carroll) - (Subjects: Kundalini, Unification, EU, Nobel Peace Prize 2012, Middle East, South America, Only 5 Currencies on Earth, Old Souls, Duality will dismiss, 3D Humanity will melt with Multi dimensional higher self, Global Unity… etc.)

Bermuda and UK territories sign anti-tax evasion deal

France24 – AFP, 02 MAY 2013

The US Virgin Islands and British Virgin Islands are seen in a NASA image
 released 09 July, 2003. Bermuda, the Turks and Caicos and other British
 overseas territories with extensive financial centres have signed agreements to
 share tax information in what the British government hailed Thursday as a
major victory in the battle against tax evasion.

AFP - Bermuda, the Turks and Caicos and other British overseas territories with extensive financial centres have signed agreements to share tax information in what the British government hailed Thursday as a major victory in the battle against tax evasion.

Anguilla, Bermuda, the British Virgin Islands, Montserrat and the Turks and Caicos Islands have agreed to "much greater levels of transparency of accounts held in those jurisdictions", Britain's Treasury said.

The move is part of an international drive to clamp down on tax havens and is designed to help British authorities find bank account holders who evade taxes by hiding their money overseas.

The agreement means the jurisdictions have agreed to pass on names, addresses, dates of birth, account numbers, account balances and details of payments into the accounts.

The jurisdictions will share the details with Britain but also with tax authorities in France, Germany, Italy and Spain.

Britain recently reached similar tax information-sharing agreements with Jersey, Guernsey and the Isle of Man.

Cracking down on tax evasion is one of Britain's priorities for its presidency of the G8 this year.

Chancellor of the Exchequer George Osborne said the move was "a significant step in tackling illicit finance and sets the global standard in the fight against tax evasion".

He called on other countries to remove the "hiding places for those who seek to evade tax and hide their assets".

Offshore Secrets

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Kenya's cellphone bank gives loans from just a dollar

Google – AFP, Daniel Wesangula (AFP), 28 April 2013

A woman sells beverages near an advertisement for a new cellphone-based

banking initiative in Nairobi on April 27, 2013 (AFP, Tony Karumba)

NAIROBI — Six months ago, Jane Adhiambo Achieng walked into a local Kenyan bank with the hope of getting a loan for her small grocery business.

After providing all the paperwork and after weeks of back and forth between her and bank officials, she was turned down.

"They just told me I don't qualify. My income was too little," said 42-year-old Achieng, who was asking for some $250 -- about half her monthly turnover -- to expand her fruit and vegetable stall in the Kenyan capital.

But in early March, she applied for the same amount through a different source -- and got the money in a matter of minutes.

She credits the Kenyan mobile telephone money application called M-Shwari that lent her the cash for facilitating the growth of her business.

M-Shwari is a new banking platform that allows subscribers of Kenya's biggest mobile network, Safaricom, to operate savings accounts, earn interest on deposits, and borrow money using their mobile phones.

It expands on Kenya's revolutionary use of sending money by mobile phone -- known as M-Pesa, "mobile money" in Swahili -- launched in 2007 and now widely used across the east African nation, where some 70 percent of people have mobile phones.

With a minimum transfer of cash set at five shillings -- around five US cents -- the application revolutionised day-to-day banking for millions left out of the formal system, and is used for transactions ranging from sending money to far-away relatives to paying utility bills or even school fees.

Now it is hoped the new M-Shwari application -- meaning "no hassle" -- can do the same for savers and borrowers.

"We have always been thinking of how to move M-Pesa forward. We knew there was a boundary to be broken and the next frontier was to be reached," said Nzioka Muita, communications manager at Safaricom, which owns both the M-Pesa and M-Shwari systems.

Through this platform, Safaricom says clients can open a bank account, move money in and out of their savings accounts, and access instant micro-credit of a minimum of 100 Kenyan shillings -- slightly more than a dollar -- at any time, all through the mobile phone application.

While loans must be repaid within a month, a single fee of 7.5 percent is charged, a far lower interest rate than high-street banks. Maximum loans depend on how much clients have in their M-Shwari accounts.

The mobile banking application has been so successful that on its first day of operations late last year, more than 70,000 new accounts were opened.

"Up to this point in time, no one in the formal banking sector had thought of implementing such an idea," said Tiberius Barasa, an economic expert with Kenya's Institute of Policy Research and Analysis.

"I am sure that a few bank managers are looking at M-Shwari steadily to see if it is a potential threat to their business."

People wait for a bus near an advertisement for a new cellphone-based

banking initiative in Nairobi on April 27, 2013 (AFP, Tony Karumba)

At least 12 million Kenyans remain outside the formal banking system, according to central bank estimates.

Safaricom controls about 70 percent of the Kenya mobile-phone market, translating to some 19 million subscribers. Of those, some 15 million are already M-Pesa users, a customer base rivalling any banking institution.

On its own, M-Pesa transactions account for more than $50 million (38 million euros) every day in Kenya.

"This is a huge head start for the company," Barasa said.

M-Shwari was launched in partnership with one of Kenya's privately owned banks, the Commercial Bank of Africa (CBA), a deal that could see it boost its slice of the banking sector of east Africa's largest economy.

The family of newly elected President Uhuru Kenyatta hold the major stake in CBA, which provides the banking infrastructure for M-Shwari.

Currently, even with its slightly over $1 billion asset base, it is still some distance away from east Africa's largest banks, such as Equity Bank, Cooperative Bank and the Kenya Commercial Bank.

"In a matter of years, through the sheer volume of transactions that they will be handling on a daily basis, CBA may become a banking powerhouse in the region," Barasa said.

Policy analysts believe that the biggest winners from the M-Shwari service will be those in the market previously thought unbankable, due to its meagre savings and individuals located in remote, inaccessible parts of the country.

"This will greatly change our lives. You can access credit from any part of the country," Abbas Godana, a school teacher in Kenya's remote eastern Tana River district, told AFP.

"You do not have to travel for miles to your bank just to complete some paperwork and wait for the manager to approve the loan."

Godana's village, Cha Mwana Muma, is some 30 kilometres (20 miles) from the nearest shopping centre in which his bank operates a branch -- which, in the impoverished coastal area, where roads are virtually nonexistent, can take a whole day to travel.

In February this year, three months after its launch, transactions on M-Shwari crossed the $35-million mark, with 1.6 million customers having used the service for deposits or loans.

M-Shwari was not the first: telecommunications company Bharti Airtel, an Indian-owned firm, launched a similar product last year known as Kopa Chapaa -- Swahili for "borrow money" -- but the product has not had as much impact.

Smaller micro-credit loan companies have also set up similar schemes.

But "Safaricom has the numbers," Barasa said. "All they need to do is ensure that whatever they come up with resonates with the majority of their subscribers."

Blow for Cameron as China welcomes Hollande

Beijing punishes PM for his meeting with Dalai Lama while French president gets full state visit treatment

The Guardian, Nicholas Watt, chief political correspondent, Friday 26 April 2013

The French president, François Hollande, meets his Chinese counterpart,
 Xi Jinping, in the Great Hall of the People in Beijing, China. Photograph:
Pool/Getty Images

David Cameron's mission to change the focus of British foreign policy by boosting trade links suffered a setback after Downing Street was forced to abandon a trip to China as Beijing punished the prime minister for meeting the Dalai Lama.

In a blow to Cameron, who had hoped to hold an annual summit with the Chinese leadership, the French president François Hollande was on Friday feted in Shanghai on a full state visit a few weeks after the prime minister was due to visit China.

Cameron is understood to have abandoned the planned trip after Beijing indicated that he was unlikely to be granted meetings with senior figures. He is now expected to visit in the autumn, two years after his first and only visit as prime minister.

Britain accepts that Beijing is exacting punishment after Cameron met the Dalai Lama, the spiritual leader of Tibet, at St Paul's Cathedral last May. The meeting, which was similar to Gordon Brown's discussions with the Dalai Lama at Lambeth Palace in 2008, was designed to minimise offence in China by showing that Britain regards him as a spiritual leader. Downing Street has made clear to Beijing that it accepts Tibet is part of the People's Republic of China.

Government sources said that tentative plans for the prime minister to visit China this month were put on hold before his visit to India in February for the simple reason that the new Chinese leadership only took over in March. Cameron spoke to Li Keqiang, his new Chinese counterpart, after his appointment.

But the Guardian understands from diplomatic sources that a visit was firmly placed in the prime minister's diary for earlier this month. This was abandoned when it became clear that the prime minister would be denied the access usually granted to a G8 leader.

Douglas Alexander, the shadow foreign secretary who has just returned from China, told the Guardian: "David Cameron came to office claiming he would prioritise the UK's diplomatic and trade relationship with China, and yet the real difficulties in relations have now been laid bare. I was in China this week and it is clear that the new Chinese leadership are focused on the French president's visit, along with a large number of French companies looking for business.

"In the past, UK prime ministers have met with the Dalai Lama without the deterioration in relations with China that we are now seeing. For all of their initial boasts and bluster, the UK government has lacked a strategic or a joined-up approach to China since it came to office, and that's now showing."

A No 10 source said: "Of course, as any good diary planner would, we pencil in early on dates when the prime minister could potentially travel overseas without going firm on destinations. We decided several weeks ago that we wanted to visit some European capitals in the time we had earlier this month. When the prime minister and Premier Li Keqiang spoke in March they looked forward to meeting in due course."

Officials said trade with China is still rising and the two countries are on course to achieve £1bn in bilateral trade by 2015. Exports to China grew 13.4% last year.

But the decision to abandon the visit is a personal setback for Cameron, who said after coming to office that he would place trade at the heart of foreign policy, with a particular emphasis on the so-called Bric countries of Brazil, Russia, India and China. A visit to India in February fell flat after private complaints that the prime minister appeared to regard the country as a trading opportunity rather than an emerging world power.

Hollande was greeted by Xi Jinping, the new Chinese president, when he arrived in Beijing with his partner Valerie Trierweiler on Thursday. They agreed to hold an annual summit – Cameron's original aspiration when he first visited China in November 2010 – after Hollande said he hoped to build a "multipolar" world. This is the classic French ambition to ensure the US cannot dominate the world in a "unipolar" world.

Cui Hongjian, director of European Studies at the China Institute of International Studies, a foreign ministry thinktank, told the South China Morning Post that this message was well received in Beijing. "France sometimes has different ideas from the US. China may co-operate with France."

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