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NEAR DHAKA, Bangladesh—women wrapped in bright fabric and carrying worn pink bank books arrive singly and in pairs. They slip through the sides of a tin-roofed bamboo shelter and drop to the woven mats covering the smooth earthen floor.

Either squatting or folding their legs under their thin bodies, the women arrange themselves in eight neat rows. Many carefully count out piles of money that they then pass to the woman at the row’s end. As each row fills with five women, a young man on a black bicycle pedals up. The chattering women clamor to their feet and, standing tall and smiling brightly, raise their hands in salute to greet him. He sits in a bench in front while the women arrange themselves on the mats again. The Grameen (village) Bank is open. In villages across Bangladesh, a similar scene in unfolding at this hour.


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Twice a morning, five days a week, 40 women — eight groups of five called centers — gather in bamboo shelters they erected to repay loans and request new ones for their tiny businesses. In sight of all, a bank worker who travels by bicycle collects their money and records their payments. In nearly 38,000 villages every week, 2.3 million people — most of them women, all of them poor — repeat this ritual.

Without a+ny collateral, these unusual borrowers boast repayment rates exceeding 95 percent. The group itself is the collateral for the individual. Five women organize themselves into a group, electing a leader and a secretary. Group members decide among themselves which two will receive the first loans — usually the neediest. When the first two have made payments for five weeks, the next two receive their loans; after they have made five payments, the final borrower receives her loan. Initial loans average around 3,000 taka (U.S. $60).

Subsequent loans grow larger and a missed installment stains not just the borrower’s record, but those of her group members, as well. No one can receive a large loan if one person is in default. Even the other 39 women in the center are affected because certain large loans are available only when entire centers have maintained spotless records.

Beyond borrowers’ remarkable repayment rates, however, is their success in boosting their families’ incomes with their businesses. One World Bank study recently concluded that the Grameen Bank ".....alleviates poverty on a sustainable basis and makes a net contribution to local economic growth." Another study found that half of all 10-year borrowers were leaving poverty.

"We hope that soon we will be able to say we are a bank of the formerly poor," says Grameen’s founder, Muhammad Yunus.

Today, the Grameen Bank is an independent financial institution that has loaned nearly $3 billion, upwards of $40 million a month in 1997. After years of reliance on donor money, the bank supports itself with interest from its loans and even makes a profit. Yunus and the bank are in the forefront of a global movement to extend credit to 100 million poor people by the year 2005.

Building on its success, Grameen has spun off other nonprofit and even commercial enterprises that all aim to help the poor help themselves. One remarkable venture is revolutionizing communication in the impoverished country.

Miles from where the phone lines end, down a long and rutted dirt road, past clusters of bamboo huts, and just beyond a stand of tall bamboo, a telephone rings. Shuffling her bare feet through a circle of grain spread on her smooth courtyard, a laughing woman lifts the sleek black cell phone she carries while working. "It’s Singapore", she calls to the family waiting on her shaded porch.

In 1997, the Grameen Bank began leasing cell phones to successful long-time borrowers. Anwara Begum, who 12 years ago first borrowed money to buy a cow, today is one of more than 100 Grameen borrowers who are running village pay phones—connecting their neighbors not just to Dhaka, the capital, but to the world at large. In another year, Anwara will own her phone and will continue to operate it at subsidized rate as long as she acts as her village’s operator. Neighbors pay her to make and receive calls, and she even takes and delivers messages.

With less than one percent of Bangladesh’s population having telephone access, the bank plans to finance phones in the nearly 38,000 villages it serves—leapfrogging existing technology and the expense of expanding it by placing mobile phones in the hands of poor villagers. Previously isolated from the centers of commerce and information, farmers will be able to check market rates for their products and demand fair prices from wholesalers who may have cheated them in the past. Grameen foresees the marriage of the wireless network with Internet technology and predicts that the newly educated next generation will telecommute from villages, instead of migrating to the city or other countries to work.

The village pay-phone program is the result of the efforts of a Grameen Bank spin off, Grameen Telecom. Grameen Telecom partnered with the Norwegian company Telenor and two smaller stakeholders, Japan’s Marubeni Corporation and New York based Gonophone, to create Grameen Phone Limited, which landed the nationwide license to provide cellular service throughout Bangladesh. Grameen Telecom’s ambitious five-year plan is to expand service to all 68,000 villages with pay phones and phones for individual subscribers. "This revolution is causing a stir among high—tech companies. It provides a model of how to sell technology to all the markets we don’t currently address in these developing countries and to do good at the same time," says Sukumar Srinivas, general manager of HP’s Internet Imaging Operation.

Following the ’97 State of the World Forum, a small group of HP employees, coordinated by Barb Waugh, worldwide personnel manager for HP Labs, and representatives from other corporations and agencies have engaged in monthly teleconferences with Grameen to explore potential partnership opportunities. A pilot project, for example, might put computers in villages for use as electronic kiosks-small businesses funded by Grameen lease loans. The kiosks would provide Internet access, e-mail and possibly even Internet phone service.

HP’s donation adds up

The Grameen Bank and other micro-finance organizations around the world now serve some eight to ten million people. Research shows that access to repeat loans is actually helping families climb out of poverty and across cultural and geographical boundaries. Poor entrepreneurs, particularly women, are proving to be profitable as well, as reliable borrowers.

For example, SEWA Bank in India, a cooperative bank of poor, mostly illiterate working women, has been profitable since 1976— its second year of operation. In 1997, after five years of operation, the microfinance arm of Egypt’s National Bank for Development generated 33 percent of the bank’s profits and promised another record—breaking year for 1998. Since 1992, profits from Bank Rakyat Indonasia’s microfinance department have exceeded the bank’s overall profits and made up for losses. Bill Higley, Internet program Manager for the Inkjet Products Group R&D, also sees Grameen and other microfinance groups as potential business partners. "We can get computing and communication solutions to customers we might not normally address,’’ he says. "We can help people in developing economies and gain additional customers for life. As Lew Platt has said, "Doing good and doing well are not mutually exclusive. In fact, doing good may be the best way to do well."

Besty Brill in
Measure, a magazine for Hewlett—Packard people, March-April,1999

A Gallant Initiative

Few days back, I went to Modhupur, Tangail. The purpose of my visit was to have a first-hand impression about the newly launched village computer and internet programme organized by the Grameen Bank (GB). En passant, one needs to recall that GB had already initiated village pay phone services (VPP) now spreading over 700 villages in Bangladesh. The most successful GB member of a village is given a cellular mobile phone at a cost of TK. 18.000 to be repaid in three years. The owners, in return, pay weekly installment @ TK. 160-200/ and earn a net income of TK. 300/week from selling phone services. However, an evaluation on that project done by the Centre for Development Research, University of Bonn, shows the positive impact of VPPs in poverty reduction and rural development.

Now, the Village Cyber Kiosk is a gallant initiative by GB that includes computers and internet. The programme is at its very infancy and reportedly, was kicked off from July 1999. Main objectives of setting up of such a centre are to acquaint rural population with the latest technologies; to create efficient human resources through computer training: help quick correspondence through e-mails etc. GB expects that at the end of the long tunnel— that seemingly is covered with clouds of smoke – the population of that area could be gifted with a developed human resource base, quick communication both within and outside the country and overall economic growth and development.

It would, perhaps, be unfair to reach any conclusions on the outcome as the project has just begun. But like others, I also believe that the next millenium is going to be dominated by ICT and Bangladesh should shrug off anti-technology attitude, if there is any. And to this effect, of course, the question that has long been looming large is whether the advent of these technologies would help the economy at large and the poor, in particular to lift them out of " vicious circle of poverty’’.

Bangladesh needs to catch the train to take her to 21^st century. In course of the journey, ICT (Information Communication Technology) should constitute her bag and baggage. In the meantime, half of the job had already been done by way of putting computers and e-mails at village level. The other half of the deed still amounts to a dream: fair price to farmers through ICT.

----Abdul Bayes, The Daily Star, Dhaka, October 16,1999