Lower-income farmers in remote villages are expected to be able to use their mobile phones soon to gain access to rural financial services.

The change in the nature of rural finance will start by making banking services immediately accessible by mobile phone.

Farmers and entrepreneurs will also be able to use mobile communications to get up-to-date market information.

Affordable, innovative mobile solutions for rural residents are being explored by a project jointly initiated by Ericsson and the United Nations Development Programme (UNDP), launched in Beijing on Saturday.

"There is huge potential for mobile phones to transform people's lives in the developing parts of the world," said United Nations Resident Coordinator/UNDP Resident Representative in China Khalid Malik.

"By opening the doors to concrete, innovative, affordable and effective mobile services, we can provide a whole range of tools to better meet the needs of the poor."

The project aims to overcome geographical isolation in the countryside, which has made access to rural financial services such as getting credit, sending remittances or making deposits expensive and difficult for people in rural China.

The three-year project will also explore ways for mobile telephone and networks to improve access to health, education and financial services.

Identifying promising ways to use mobile technology to achieve social objectives and develop pilot projects is still in progress, as the country's mobile banking services are still mostly in urban areas.

However, Mats Olsson, president of Ericsson China, said that China is an ideal place to develop new technologies and services with widespread mobile network coverage and use of mobile phones.

China is the No 1 country in terms of mobile phone users with its more than 556 million users by January this year, official statistics showed.

"This type of innovation at the frontier is precisely what this new partnership aims to foster," Malik said.

"By uniting UNDP's vast experience in development with Ericsson's cutting-edge telecoms expertise, I am confident that we can find solutions that really make a difference - for China and for the world."