Mobile Microfranchising

Grameen Foundation’s mobile microfranchising work builds on our early Village Phone efforts in Uganda, through which we honed and scaled the Village Phone model started by Grameen Telecom in Bangladesh.

The Village Phone model was based on providing a loan and a “business in a box” to a poor entrepreneur, enabling her to provide customers with access to a mobile phone and the ability to call or text their family, friends and business associates. Our work in Africa on this initiative enabled poor people in five different countries to start a new line of business.

In 2007, with the generous support of Qualcomm’s Wireless Reach™ Initiative, GF began to expand the Village Phone model beyond Africa to Indonesia, where we quickly discovered that the traditional Village Phone business model did not work, because many poor people already had access to phones. After consulting with our partners, we created the “mobile microfranchise” model, which again leverages the mobile phone, but extends the offering beyond making phone calls to selling mobile airtime and offering a diverse array of data services to the poor. 

This focus on the resale of mobile airtime – a commodity product that is purchased frequently, in small denominations, can be provided through the phone, is easy to track and distribute, and smoothes the cash flow of a poor entrepreneur – is key to the mobile microfranchise model. Additionally, the franchise nature of the business translates to lower risk for first-time entrepreneurs, while the mobile aspect of the business enables unique business opportunities (e.g., selling of airtime, providing job search services, conducting mobile surveys), scale and economics, because it’s less expensive to reach people in very rural areas with a phone.

In the years since we began our collaboration with Qualcomm, the company has, through its Wireless Reach™ Initiative, provided funding to GF to launch AppLab Indonesia (a mobile-services and business-incubation center) and PT Ruma (an Indonesian social enterprise that is recruiting, training and supporting the network of poor entrepreneurs that AppLab’s mobile services empower). Qualcomm has also dedicated engineering, business development, and marketing and communications support for our collaboration. Our success in Indonesia would not have been possible without this strategic and multi-dimensional partnership. Watch the video below for a glimpse into the project:

Bakrie Telecom (BTEL), which holds about a 12% market share in Indonesia, is our CDMA mobile operator partner. Grameen Foundation has a 12-month agreement to deploy its AppLab suite of Livelihood services on multiple shipments of mass-market phones starting in the summer of 2011.

PROGRESS TO DATE
Ruma launched the “managed channel” (which involves direct recruitment and support of poor women as entrepreneurs) in August 2009, and will launch the “mass market channel”(involving applications and services that can be accessed directly through the phone, creating “instant entrepreneurs”) in summer 2011. By March 2011, the program had achieved the following:

• 6,876 entrepreneurs had been recruited into the network, 85% of whom are women
• 560,000 customers are served by the entrepreneurs
• 64% of entrepreneurs have incomes of less than $2.50/day (as measured by Grameen Foundation’s Progress out of Poverty Index™)
• 10 % of entrepreneurs have incomes of less than $1.25/day (as measured by the PPI™)
• Almost 50% of entrepreneurs who stay in the program for four months are able to double their average daily income
• Ruma has identified and is implementing ways to prevent drop-outs
  

THE FUTURE
Our vision for the future is to expand the model across Indonesia and prove the viability of the microfranchise as a sustainable social business, while preparing the “mobile microfranchise” concept to be replicated and expanded worldwide.

SUPPORTING OUR WORK
While we have learned and achieved many things so far, we need your support to ensure that these programs can continue and become self-sustaining, and that the model can expand within and beyond Indonesia.

$400 can help recruit and train a new entrepreneur to become part of the Ruma franchise network
$550 can provide ongoing support and training for one entrepreneur per year
$50 can provide one business kit (phone, charger, marketing materials) for an entrepreneur

This means that $1,000 can double the income of a poor woman entrepreneur and provide her with lifelong skills, as well as the confidence and ability to improve her life and the lives of her children. The opportunity is there – won’t you help us empower the poor by donating today?