Kampala, Uganda, November 18, 2003 —
Uganda’s Vice President, Professor Gilbert Bukenya, yesterday officially
launched “MTN villagePhone,” an IFC-supported joint venture between the
country’s leading telecommunications company, MTN Uganda, and Grameen
Foundation USA. The vice president launched the rural telecommunications
initiative in a ceremony in rural Kayunga District, by making a symbolic
inaugural call using the Village Phone business owned by Sophia Nalujja,
one of 115 Village Phone Operators currently operating across Uganda.
MTN villagePhone extends telecommunications access to rural villages in
partnership with local microfinance institutions by creating opportunities
for individuals living in impoverished rural areas to become “Village
Phone Operators.” Village Phone Operators take microloans for the
equipment for as little as US$230 to be repaid over a period of up to 12
months. They then raise their incomes by selling mobile phone service in
areas where electricity is unavailable and the existing MTN network can
be accessed only with a booster antenna and other equipment.
IFC has provided funding for the project from its SME Capacity Building
Facility, its grant window for innovative small business pilots and partnerships.
The CBF support continues IFC’s commitment to improving telecommunications
in Uganda. In 1997, before privatization of the state-owned telecom company,
IFC advised the Ugandan government on introducing much-needed competition
via an auction process to license a second private national operator. The
bid was won by MTN, which has become the country’s leading telecom company,
holding a 70 percent share of the entire subscriber market.
The CBF’s mandate is to help transfer good models of small business development
from one country to another. It thus took a strong interest in this replication
project initiated by the U.S.-based foundation arm of Bangladesh’s 2.8
million-borrower microfinance institution Grameen Bank. Since teaming with
other partners to launch an IFC-financed mainstream cellular company in
Bangladesh six years ago, the well-known nongovernmental organization has
operated a parallel project called Grameen Telecom which has enabled 40,000
village operators to sell phone time to local residents and thus earn average
net incomes of $700 per year—roughly twice the national average. The new
access to information generated by this profitable, self-sustaining project
is credited with increasing the social status of women and enhancing productivity
"Grameen Telecom has always been cited as one of IFC's successes in
terms of extending services to rural areas and empowering women,” said
the World Bank Group's Director for Global Information and Communication
Technologies Dr. Mohsen Khalil. “As a result, we strongly support the
expansion of this program to Africa, where connectivity remains a challenge,
particularly in rural development and bringing Africa into global information
economy. The program is also consistent with the World Bank Group's information
and communications technology strategy, which is increasingly emphasizing
the need for innovative, inclusive solutions to extending universal service
to poorer, rural areas."
The first replication of that model outside of Bangladesh, MTN villagePhone
is currently working with five Ugandan microfinance organizations: Foundation
for International Community Assistance, Foundation for Credit and Community
Assistance, Support Organization for Micro-Enterprise Development, Uganda
Microfinance Union, and Ugandan Women's Finance Trust. The joint-venture
company will continue to partner with other microfinance organizations
to further expand services throughout Uganda.
Grameen Foundation USA is a nonprofit organization based in Washington,
D.C., which empowers the world’s poorest people to lift themselves out
of poverty with dignity through access to financial services and information.
The Village Phone program is managed by the Grameen Technology Center,
an initiative of Grameen Foundation USA, and is supported by the World
Bank infoDev, IFC, and others.
The mission of IFC is to promote sustainable private sector investment
in developing countries, helping to reduce poverty and improve people's
lives. IFC finances private sector investments in the developing world,
mobilizes capital in the international financial markets, helps clients
improve social and environmental sustainability, and provides technical
assistance and advice to governments and businesses. From its founding
in 1956 through FY03, IFC has committed more than $37 billion of its own
funds and arranged $22 billion in syndications for 2,990 companies in 140
developing countries. IFC's worldwide committed portfolio as of FY03 was
$16.8 billion for its own account and $6.6 billion held for participants
in loan syndications.