Village Phone: Connecting Technology and Innovation
Access to affordable telecommunications simply does not exist for millions in the developing world. For some, placing a phone call can require traveling over six miles from their homes. This can mean leaving work and losing out on desperately needed income. Cut off from easy access to communications, these communities are at both an enormous economic and social disadvantage.
Based on the pioneering work of the Grameen Village Phone in Bangladesh, Village Phone and Village Phone Direct extends the benefits of affordable telecommunications access in a sustainable, profitable and empowering way. This relatively inexpensive technology can solve many of the problems the poor in rural villages have faced for decades. Grameen Foundation serves as a catalyst and creates the linkage between the telecommunications sector and the microfinance sector to enable microfinance clients to borrow the money needed to purchase a “Village Phone business” – literally, a business in a box. These grassroots entrepreneurs, or Village Phone Operators (VPOs), operate their businesses in rural villages where no telecommunications services previously existed; they rent the use of the phone to their community on a per-call basis. The VPOs provide affordable rates to their patrons while earning enough to repay their loans and earn profits that allow them to make investments in their children’s health, nutrition and education, and in other business ventures.
Village Phone projects are currently underway in:
Village Phone allows everyone to benefit. VPOs have strong, thriving businesses. Microfinance institutions provide financial services and earn income on the loan interest, as well as commissions from the sale of prepaid airtime cards to their clients. They also attract new clients who are drawn by the opportunity to start a technology-oriented business. Telecommunications companies we partner with benefit by tapping a new market while at the same time furthering their social responsibility objectives. More importantly, individuals living in rural communities gain access to affordable telecommunication services linking them to their friends, family, business contacts and the world.
Village Phone allows everyone to benefit. Village Phone operators have strong, thriving businesses. To spur a global movement to provide telecommunications access for the world's rural poor, Grameen Foundation authored a Village Phone replication manual, the first step-by-step guide for replicating this successful program in other developing countries. It draws on the pioneering work of Grameen Telecom in Bangladesh where Village Phone first began and Grameen Foundation’s experience in launching the first successful replication in Uganda. The manual, which was published by the United Nations Information and Communication Technologies Task Force, has already inspired the creation of Village Phone initiatives in Senegal.
Village Phone has become recognized as a solid business model for reaching rural populations. It is also acknowledged as a sustainable development tool by governments and development agencies such as the World Bank, the United Nations, the International Finance Corporation and USAID.
Village Phone projects are currently underway in the Rwanda, and Uganda. For further information on Village Phone, please contact us at villagephone@grameenfoundation.org.
References / Past Projects
What We Do:
Microfinance helps people to escape poverty by giving them collateral-free loans and other financial services to support income-generating businesses. As each loan is repaid, the money is redistributed as loans to others, thereby mulitiplying its impact. We support microfinance programs that enable the poor, mostly women, to lift themselves out of poverty and make better lives for their families. To do this, we partner with a worldwide network of microfinance institutions.
Our work focuses on four key areas.
1. Supporting microfinance institutions: Our partner microfinance institutions (MFIs) work on the front lines daily, meeting the needs of clients and reaching out to others who can benefit from microfinance. To help them be efficient and effective and increase their outreach, we provide microfinance program support in the form of funding, technical assistance, training and new technology.
2. Harnessing the power of technology: Grameen Foundation's Technology Center is the leader in information and communications technology (ICT) initiatives that are dedicated exclusively to advancing microfinance. To help microfinance reach its full potential, we are driving industry-changing innovations that increase the efficiency of microfinance institutions' operations, create new microbusiness opportunities for the poor, and provide telecommunications access for the world's rural poor.
3. Connecting microfinance institutions with capital markets: Our Capital Markets Group is harnessing the vast resources of local and international capital markets to bring new financial resources to our microfinance institution partners. With more than 400 million poor people cut off from financial services, there is a huge, unmet need for microfinance. To reach them, MFIs need capital beyond the traditional philanthropic support to rapidly expand their operations and increase outreach.
4. Expanding microfinance industry knowledge: New ideas and innovative thinking will drive the expansion and effectiveness of microfinance. Knowledge sharing is an important component of our work. To have the greatest impact on global poverty, we are committed to sharing ideas and innovations with the wider microfinance community. We hope this "open-sourcing" of information will guide other organizations in improving the industry's outreach to the more than one billion people living in abject poverty.
