While the concept of bridging the digital divide enjoys high priority in the development agenda of many developing countries, converting good intentions into project finance for ICT4D (Information and Communication Technologies for Development) remains a challenge. Confronted with numerous competing priorities to meet their commitments to achieve the Millennium Development Goals, governments are rarely able to initiate sustainable and effective financing for technology projects that focus on poverty.

To overcome this constraint, the multi-stakeholder partnership approach is increasingly becoming a viable and influential strategy for financing ICT4D projects in developing countries. The Village Phone program in Bangladesh has emerged as a success story in attracting financial involvement and support from diverse stakeholders ranging from international business enterprises to bilateral donor agencies.

Village Phone is an innovative program bringing new information technologies to isolated rural areas while at the same time addressing issues of poverty and women's empowerment. All of the Village Phone operators are rural women who purchase a cell phone with a loan of about US$350 from Grameen Bank. These operators then sell mobile telephone services to their fellow villagers, both making a living and paying off their loans. The program now has a subscriber base of about 140,000 and has spread to more than 35,000 villages in 61 out of 64 districts of the country. Livelihoods have been created for women whilst villagers enjoy previously unavailable telephone services. A number of studies show that the Village Phone program has had a positive impact on the rural economy and helped to free rural women from poverty.

The program began in Bangladesh and has already been replicated in Rwanda and Uganda. Village phone has created livelihoods opportunities for many women, and the villagers enjoy previously unavailable telephone services.

Established in 1997, the Village Phone program involves a diverse and complex range of stakeholders. The mobile phone infrastructure is provided by Grameen Phone Ltd through an arrangement with Bangladesh Railway (owned by the government) to carry the 1,800 km fiber-optic network. Grameen Phone initially raised $60 million in loans from the World Bank's International Finance Corporation (IFC), Asian Development Bank (ADB), UK Commonwealth Development Corporation, and NORAD/NORFUND of Norway. The company is now owned by Telenor of Norway and Grameen Telecom, the not-for-profit company which manages the administration of Village Phone throughout the country. Grameen Telecom was able to buy its 35% share in Grameen Phone with funding from the US based Soros Foundation which has in turn recently underwritten its refinancing by a local bank.

A number of international organizations including InfoDev of World Bank, International Development Research Center (IDRC) in Canada, UNDP, Markle Foundation in the US, and the Development Gateway Foundation have helped to disseminate information on Village Phone worldwide. As a result, the program has already been replicated in Rwanda and Uganda with financial support from the World Bank and the Grameen Foundation USA.

The impressive success of Village Phone demonstrates the viability of the multi-stakeholder partnership approach to financing ICT4D projects. All partners were involved in the planning and implementation of the project and have ‘shared resources and risks' to achieve common goals and worked together toward sustainability of the partnership. The "marriage" between Foreign Direct Investment (FDI) and Overseas Development Assistance (ODA) in the Village Phone program meets the objectives of building global partnership as expressed in Target 18 of Millennium Development Goal 8 - "In cooperation with the private sector, make available the benefits of new technologies, especially information and communication technologies". Village Phone also complies with the Plan of Action of the World Summit on the Information Society (WSIS) held in Geneva in December 2003. It highlights the role of the private sector not only as a market player but also as an effective and dynamic stimulator of development using information and communication technologies.




Contributed by Nazrul Islam, a OneWorld Volunteer Editor contributing to the Bangladesh Guide. Nazrul is currently studying at the Institute of Development Studies, Massey University, New Zealand.Reprinted with permission from One World UK .

To read another Global Envision article about technology aiding development, see n-Logue's Rural Connectivity Model

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