Last fall I was fortunate to be able to attend the Asian Pacific Information Technology Summit held at the Fairmont hotel in San Francisco. The summit was attended by leaders of major Asian and American IT companies as well as many government official responsible for economic development. The CEOs of Netscape, Cisco Systems, Oracle, Acer, Diamond Multimedia, Boeing and even Rupert Murdock gave talks and presentations. One of the best keynote presentations was given by Andy Grove of Intel. He gave a detailed slide show on the global future of computing and simulated demonstrations of electronic commerce, education and tele-medicine. His key message was that we're heading toward a world of a billion connected computers. In a world of that mass of broadly available connected computers, problem after problem can be addressed easier with that technology.
At a press session after his presentation I was able to ask him this question, "According to UNESCO research 50% of the world's people have never made or received a phone call. These people, who are the world's poor, have the same basic needs for education, medicine and the development of their own micro enterprises. How can today's information technology reach and help them?" His answer was pragmatic and optimist. He said, " Basically it is a matter of looking at a glass as half empty or half full. The future for connecting the other half will be a progression based on the fundamental forces and trends that got us to where we are now and are continuing to drive economic development today."
There is a new trend in the world that is giving evidence that less developed countries and poor people may be able to use new technologies and make leapfrog progress in certain areas. One example of this trend is a recent announcement that the Peoples Bank of China working with Visa will issue 2 million smart cards, transaction cards embedded with computer chips, next year in China. Unlike the United States, China does not have an extensive system for handling payments by plastic. As a result China is able to leap frog to smart card technology. A more significant example is the Grameen Bank in Bangladesh which is developing new businesses using communications and Internet technologies to increase business opportunities to Grameen members.
The Grameen Bank was founded in Bangladesh in 1976 by Professor Muhammad Yunus. The bank began by offering loans of $50-100 to poor women. These loans allowed the women access to capital for crafts, food production or animal husbandry. Grameen Bank has reversed conventional banking practice by removing the need for collateral and created a banking system based on mutual trust, accountability, participation and creativity. The bank provides credit to the poorest of the poor in rural Bangladesh, without any collateral. Grameen found that by lending to women, profits were used to improve the family's quality of life, and led to a rise in the woman's status. The Grameen bank provides the rural poor a vehicle for self employment and a proven path that leads out of poverty to sustainable enterprises and self reliance. Today Grameen Bank lends more than $30 million each month to more than 2 million borrowers. As of November 1997, the Grameen Bank has 2.3 million borrowers in 35,000 Bangladeshi villages and over 1,080 branch offices throughout Bangladesh. The repayment rate is a phenomenal 98%. Twenty percent interest is charged on regular and joint loans, and 8% on housing loans. 8.5% interest is paid on member's savings. The total balance of members' savings exceeds $150 million.
Grameen Bank has been recognized by development economists and world leaders as providing a powerful new economic model for eliminating poverty. This has led to the spread of 58 similar micro-lending banks and projects in 22 countries. There is now an international campaign to reach 100 million of the world's poorest families, especially the women of those families, with credit for self-employment and other financial and business services by 2005. Many of the bank's admirers see Professor Yunus as a social crusader. He sees himself as something else. "I am a businessman," he says, "but it's business with a twist. I practice business with a social objective. We look for market solutions to social problems."
The Grameen Bank has recently expanded its scope to developing businesses that use communications and information technology to provide new business and trade opportunities to it's members. It is working with the government of Bangladesh, local universities and communications companies to provide telecommunications and Internet access to the cities and rural villages of Bangladesh.
Grameen Telecom is a company dedicated to bringing the information revolution to the rural people of Bangladesh. It now offers cellular phone service in Dhaka and in rural villages. Grameen Telecom is planning, over the next 6 years, to provide GSM 900 cellular mobile phone service to the 100 million rural inhabitants in the 68,000 villages of Bangladesh. In March 1997, Grameen Telecom launched its cellular operations in rural Bangladesh. Twenty-eight Grameen Bank borrowers became pioneers in the provision of telephone service in their villages. Women, chosen by their fellow Grameen borrowers, were able to take a loan of approximately $350, which covers the cost of the phone, hook-up, training, and repair services. As the "wireless women" of their villages, they purchase the airtime at wholesale prices from Grameen Telecom and sell the telephone service to their neighbors at the market rate.
The phone operators have thus far been earning net profits of approximately $2 a day: more than $700 a year. This is significantly more than $250, the average annual per capita income in Bangladesh. At present, Grameen Phone, the cellular company providing services in the urban areas, has 20,000 subscribers. This impressive number was achieved in eight months. Over the next six years, Grameen Telecom anticipates 1 million Grameen Phone subscribers and 50,000 village payphones owned and operated by Grameen Bank borrowers.
Grameen Cybernet Ltd. has been Bangladesh's leader in Internet service provision since it commenced operation in July 1996. Its Chief Executive has had an extensive career in education and information technology in the US and is assisted by a team of bright, young executives. The company has over 1,500 clients in various sectors. The company is a joint venture of Grameen Fund and CITech Limited, a well-known private computer and information technology distributor.
Grameen is in the process of beginning a pilot project for Grameen Bank borrowers to take loans that would allow them to own and operate profitable "Cyber Kiosks" that make it possible for people in their village to access computers and the Internet for income-generation, education, entertainment, and other purposes. Grameen believes that increasing poor people's access to information by bringing the Internet to their doorsteps will bring multiple benefits to both the Cyber Kiosk owners and the people in their communities. For example, unemployed, educated young women will be able, with some training, to do data entry and perform transcription services for any company in the world, a much better alternative than moving to squalid urban slums to work in factories. And farmers will benefit from being able to find the price of their produce in a much larger area through the Internet. In general, making information available will reduce economic inefficiencies as well as exploitation of the poor, while at the same time bringing jobs to their doorsteps.
Grameen Shakti (GS) is a not-for-profit rural power company whose purpose is to supply renewable energy to unelectrified villages in Bangladesh. Grameen Shakti's mission is not only to supply renewable energy services, but also to create employment and income-generating opportunities in rural Bangladesh. GS focuses on supply, marketing, testing and development of renewable energy systems such as solar PV, biogas and wind turbines.
Grameen Shakti started by installing 26 solar household systems in selected villages in Bangladesh. Many more have been installed since then. In addition, two experimental wind turbines have been installed and an integrated bio-digested pilot project has been launched. Grameen Shakti is developing the ability to provide electrical power to rural village that are "off the grid" and supply scalable power solutions for Internet and wireless cellular connectivity.
Grameen Uddog is another member of the Grameen family of companies. Incorporated as a not-for-profit company, Grameen Uddog ( which means rural initiatives ) manages the production of locally produced handloom fabric called "Grameen Check". In Bangladesh, the word "check" includes many colorful traditional plaids and gingham checks. The mission of Grameen Uddog is to revive the handloom industry in rural Bangladesh and link it up, in a modern, business-like way, with Bangladesh's booming export-oriented garment industry.
Uddog has field offices located in the villages where the weavers live. Using the Grameen Bank model of credit for self-employment, Grameen Uddog provides quality yarn and orders to village-based weavers, enabling them to fill orders from home and abroad according to international standards. Grameen monitors the quality of fabrics at all points of production. Grameen Uddog pays the weaver each and every time 25-yard lengths of fabric are delivered to the distribution centers.
To fulfill Grameen Uddog's mission of reviving the handloom industry of Bangladesh, export markets must be created for Grameen fabric and ready-made garments. Grameen Foundation USA is working to make this happen by using the Internet to create new distribution networks and worldwide marketing relationships. Internet based communication and online commerce is allowing Grameen Textile Project managers to interact with buyers and wholesalers anywhere in the world. Markets are being researched, manufacturers contacted, and new products are being developed that will create repeat business for the proud weavers of Bangladesh. Every yard of exported Grameen fabric increases the ability of rural weaving families to stay employed in their villages passing their artistic skills to the next generation.
The Grameen Bank has developed several major business enterprises that are requiring strategic relationships and joint ventures with US based Internet and technology companies. The Grameen Foundation USA, serving as the representative of the Grameen Bank, is interested in meeting with information technology companies to explore new business opportunities. It recently had a meeting in Seattle that was co-hosted by Craig McCaw, founder of Cellular One and Teledesic LLC, and attended by 20 representatives from Microsoft, Nextel International, and other organizations.
This illustrates a significant trend in global business. With vision and focused effort it is possible for even the poorest people of our world to participate in and benefit from the new Internet and information economy. Indeed in certain areas technology can help them to get ahead by starting ahead.
Brian Webster writes about technology issues for Unity News. He is a volunteer with RESULTS, an international anti-poverty citizens lobby that supports microenterprise solutions and an active member of the Association of Internet Professionals. He can be reached at brian@brianwebster.com.