Washington, D.C., April 11, 2008—IFC,
a member of the World Bank Group, today announced that it is providing
a loan to Ruralfone, a telecommunications company in Brazil,
to help extend low-cost telephone services to rural villages in Ceará,
one of the country’s poorest states.
IFC’s investment of up to $6 million equivalent will support Ruralfone’s
plans to improve access to telecommunication services for the poor. It
will also reduce costs, while increasing the quality of the service. This
will spur competition and benefit small and medium enterprises that operate
in Ceará. The loan will also support Local Serviços de Telecomunicações,
Ruralfone’s Brazilian subsidiary, as it aims to expand its customer base
from 6,000 users to 35,000 by 2010.
Denis Côté, President and CEO of Ruralfone, said, “By providing good quality
service at lower costs, we have increased telephone penetration substantially
in four pilot cities, and we are planning to extend services to at least
10 more towns in Ceará during the next 18 months.”
Andrew Gunther, IFC General Manager for Brazil, said, “Through this investment,
IFC is helping implement a unique business model that will reach people
in one of Brazil’s poorest areas.”
Local Serviços de Telecomunicações targets low-income consumers who value
price and connectivity more than mobility. Inexpensive and readily available
GSM handsets ensure that the service is affordable to more customers for
the first time. About 50 percent of Local’s clients did not have a phone
IFC, a member of the World Bank Group, fosters sustainable economic growth
in developing countries by financing private sector investment, mobilizing
private capital in local and international financial markets, and providing
advisory and risk mitigation services to businesses and governments. IFC’s
vision is that poor people should have the opportunity to escape poverty
and improve their lives. In FY07, IFC committed $8.2 billion and mobilized
an additional $3.9 billion through syndications and structured finance
for 299 investments in 69 developing countries. IFC also provided advisory
services in 97 countries. For more information, visit www.ifc.org.
Ruralfone Inc is a United States–based entity that was established to
provide basic, low-cost telephone services in smaller villages and cities
in developing countries. In May 2005, through its Brazilian subsidiary,
Local Serviços de Telecomunicações Ltda, the company launched its pilot
in Ceará, with support from the Overseas Private Investment Corporation.
For more information, visit www.ruralfone.com.