February 9, 2004Tim Wood

twood@gfusa.org

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

10000

15000

20000

25000

30000

35000

40000

1997 1998 1999 2000 2001 2002 Oct 2003

Year

Tota

l Ope

rato

rs

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