February 9, 2004 Tim Wood [email protected] Grameen Technology Center An initiative of Grameen Foundation USA Working to eliminate poverty by leveraging the power of microcredit and technology The Microfinance Channel to Market
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February 9, 2004Tim Wood
Grameen Technology CenterAn initiative of
Grameen Foundation USA
Working to eliminate poverty by leveraging the power of microcredit and technology
The Microfinance Channel to Market
Grameen Technology Center Background
Make the delivery of microcredit even more efficient
Enhance income generating opportunities for the rural poor
Provide poor communities with access to information for better health and education
Technology Center Projects
Automating MicrofinanceVillage Computing Project - IndiaVillage Phone Replication - UgandaUtilize MFIs as channel to market
Deep connections into rural areasCredible and trustedExisting customer baseInterested in new revenue opportunitiesTechnology businesses for the poor
Village Computing IndiaLaunched 6 kiosks in Tamil Naduin August 2003Microfinance Partner: ASA
Indigenous microfinance organization60,000 members
Technology Partner: DrishteeDeveloped local language web portalFor-profit endeavor
Kiosks located in larger villages (8,000-10,000) within Trichydistrict
Tamil Nadu, India
Trichy DistrictPudukottaiDistrict
Tamil Nadu District Map
Village Computing ProjectWide range of services
E-Governance (complaints, forms, schemes)Q&A (Agriculture, Animal Husbandry)Matrimonial ListingsOnline MarketHoroscopesComputer classesCopying, typing, desktop publishing, games
GoalsProfitable in six monthsDevelop a replicable, sustainable business, technical, and operational model for ‘Village Computing’
Village Computing ResultsFive kiosks crossed break-even point after first four months (goal was six months)Will be launching 14 additional kiosks in March 2004
Four will be in smaller villagesInformation runner program in MayIn discussion to expand to Andhra Pradesh
Clear value to relationship with ASAEngaged in optimizing performanceAccess to both entrepreneurs and customersUse center meetings to advertise servicesClear applications for technology
Village Phone Program in Bangladesh
Launched in March 1997Goal: To bring phone service to rural villagesLoans made to enable purchase of mobile phonesOperators act as a community phone/public call officeAccess to information quickly for villagesNew weapon against poverty
Phenomenal Success and Growth
0
5000
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15000
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25000
30000
35000
40000
1997 1998 1999 2000 2001 2002 Oct 2003
Year
Tota
l Ope
rato
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Village Phone ResultsExtended phone service to over 57 million peopleOver 40,000 “village phone ladies” as of Oct 2003Average of 57 min usage per day (incoming + outgoing)Operator’s average net income $58/monthIncrease in social status of womenEnhanced productivity for villagersDecreased impact of middlemenCompletely profitable and self-sustaining for all parties (Operators, MFI, Telecommunications company).
Replication of Village Phone
Grameen Technology Center launched effort to directly transfer experience from BangladeshGlobal analysis for suitable market
Total number of microfinance clientsExisting telecommunications infrastructurePoverty and rural demand
Uganda chosen as first country for replication
Grameen has established a relationship with MTN Uganda (70% total market share)Creating new company: MTN villagePhone50-50 ownershipNo subsidies
Starter KitMFIs identify VPOs and provide loan capital for purchase of starter kits (approx US$250/kit).
Mobile phone + batterySIM card 100,000/= airtimeSignage and marketingRecharging solution (automobile battery/solar)Village Phone Operator manualExternal antenna optional
Current StatusFormal launch in November 2003Over 200 phones deployed in 19 districtsNine Microfinance partnersUsage 25% higher than predicted, well above sustainability baselineLarge majority of calls are domesticFour local staff employed for management and operationsSupported by USAID, AED, IFC, CGAP, World Bank
Steps for ReplicationEvaluate coverage and identify telecommunications partnerIdentify channel to marketConfirm rural demandNegotiate low cost airtimeAssemble affordable hardware packageBuild volume business
Rural Demand
MFI outreachCommunicationscoverage
Target
Thank You
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