November 2006

Bringing the benefits of mobile communications to rural villages

Nokia, together with the Grameen Foundation, have joined forces to provide rural areas with access to affordable telecommunication services, thus boosting economic development in rural communities.

The Village Phone concept is based on the pioneering work of Professor Muhammad Yunus and the Grameen Bank in Bangladesh, awarded the Nobel Peace Prize in 2006. It has since been replicated in Uganda and Rwanda. The concept uses microfinance as an innovative tool to create entrepreneurship. It also aims to boost network connections in areas with infrastructural limitations.

In Rwanda, Village Phone aims to create over 3,000 new small businesses throughout the country within the next three years. Five thousand new businesses have been created in Uganda since 2003, and the numbers continue to grow. The Grameen Foundation and Nokia are looking into replicating the model in other countries.

A microfinance loan of approximately US $200 allows the Village Phone operator to purchase a mobile phone kit. The kit comprises a Nokia handset, a SIM card preloaded with prepaid airtime, an external antenna set (including a booster antenna, a coupler, and a cable), and marketing materials. The loan is usually for a period of up to nine months, at an interest rate of not more than four percent.

Village Phone operators are typically able to repay their loan within six months, from the revenue of operating the Village Phone. The extra income earned from their business can, for example, secure their children's education or pay for a house for their family.

The Village Phone project is an excellent example of today's collaborative efforts to make universal access a reality.