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Village Phone - A Tool for Empowerment
Ryan Stanley, Gramen Foundation (USA)
November, 2005

http://www.grameenfoundation.org/pubdownload/~pubid=25

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Introduction
In an increasingly interconnected world, the ability to efficiently access and share information can have dramatic implications for social and economic development. As worldwide demand for Information and Communication Technology (ICT) services grows, so does the potential for these services to improve the lives of the poor. This article will examine how microfinance can serve as a platform for the provision of ICTs to the rural poor. It will consider how a successful microfinance product, such as Village Phone, can increase women’s empowerment and welfare. In addition, this article will reflect on the connections between women’s empowerment and the HIV/AIDS pandemic, exploring ways the microfinance sector can help to alleviate the burdens associated with the disease and decrease women’s vulnerability to infection. The article draws from research on and experience from Village Phone programs in Bangladesh, Uganda, and Rwanda.

Village phone background
Grameen Telecom of Bangladesh gave birth to the Village Phone concept in 1997 with the launch of Grameen Phone. Grameen Bank clients were provided with loans for the purchase of a digital Global System Mobile (GSM) phone to launch their own public phone business. The operators use the phone to provide telephone service to other residents of their community, earning enough revenue to repay their loan and continue indefinitely with an income generating business. In May 2005, there were more than 110,000 Bangladeshi Village Phone Operators (VPOs) providing telecommunications services to their communities. Ninety-nine percent of these operators are women. Each of these phones provides communication access to an average of 1,500 people, with a total of over 100 million people covered throughout the country.

The Village Phone program is a socially beneficial and profitable enterprise that demonstrates how public and private sector cooperation can make a significant contribution to poverty reduction. The Grameen Technology Center, an initiative of Grameen Foundation USA (GFUSA), established the first replication of the Grameen Village Phone model with the launch of MTN villagePhone Uganda (vP Uganda) in November 2003. Incorporated as a for-profit company, vP Uganda is a joint venture between GFUSA and Mobile Telephone Network (MTN) Uganda, the leading GSM network service provider in the country. MTN Uganda benefits from the partnership though increased clientele, additional traffic on their network, and through fulfillment of governmental public assess requirements. Nine indigenous microfinance institutions (MFIs) have partnered with vP Uganda to provide financing to clients for the purchase of Village Phones. In May 2005, more than 1,500 Village Phone Operators were serving rural villagers in 49 of 56 districts throughout Uganda. To date, vP Uganda has demonstrated financial sustainability for all partners involved and is on target to become a profitable company providing telecommunications services to the poor.

In April 2005, the GFUSA Technology Center began a similar pilot Village Phone program with three microfinance organizations and 50 Village Phone Operators in fifteen districts of Rwanda. Initial goals are set for the deployment of 5000 Village Phones in Uganda and 3000 in Rwanda within five years of their respective business incorporation dates. Though relatively modest goals compared to those of the Village Phone program in Bangladesh, they represent the first steps in validating the Village Phone concept for replication in developing countries worldwide.

GFUSA recently published a manual which presents a general replication model for the Village Phone program incorporating best practices from Village Phone programs in Bangladesh, Uganda, and Rwanda. This manual provides businesses, non-governmental organizations (NGOs), and governmental organizations with the opportunity to initiate Village Phone programs in countries around the world and improve rural communications. The replication manual is available online at www.gfusa.org

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