Grameen Foundation : What we do : Technology Programs : Village Phone Direct : FAQ Village Phone Direct
Frequently Asked Questions About Village Phone Direct
What is Village Phone?
What is Village Phone Direct?
Why is Village Phone Direct necessary?
How is Village Phone Direct different from “Traditional” Village Phone?
Do you recommend Village Phone or Village Phone Direct for my country?
Is Village Phone Direct designed for urban or rural markets?
What equipment is in the Village Phone Direct Kit?
How much does the kit cost?
What will the program be called in my country?
Is the Village Phone Direct program sold exclusively to microfinance institutions?
What do I need to start a Village Phone Direct program?
Who are your supporters?
See also: Village Phone Direct
What is Village Phone?
Village Phone brings affordable telecommunication access to the rural poor in a way that is both sustainable and profitable. Through for-profit and non-profit partnerships, Village Phone links the telecommunications sector with the microfinance sector to enable microfinance clients to borrow the money needed to establish a Village Phone business in their rural communities. These grassroots entrepreneurs, Village Phone Operators, then rent the use of the phone on a per-call basis providing both affordable telecommunications access in their community while earning enough to repay their loan and raise their level of income.
What is Village Phone Direct?
Village Phone Direct is an approach to the Village Phone model that allows virtually any microfinance institution to directly develop a Village Phone product for their clients and to select the local telecommunications provider to purchase the pre-paid vouchers. Grameen Foundation has partnered with Nokia to make a “Village Phone Equipment Kit” available for purchase in developing countries. Microfinance clients can purchase this kit through their microfinance institution, by taking out a loan which will be repaid with proceeds from the business. The client is now a Village Phone Operator and rents the use of the phone on a per-call basis to people in their community. The program is described in detail in Grameen Foundation’s “Village Phone Direct” manual, and is available by contacting us at VPD@grameenfoundation.org.
Why is Village Phone Direct necessary?
In many countries, telecommunications companies have not defined a public access strategy for rural markets. In this case, Village Phone Direct allows an MFI to bring mobile communication services and new business opportunities to their clients and select the local telecommunications provider. Furthermore, Village Phone Direct can be implemented in situations where the national infrastructure – mobile signal coverage, breadth and strength of MFI sector – may not be sufficient to support a more comprehensive, national Village Phone approach.
How is Village Phone Direct different from “Traditional” Village Phone?
In a “traditional” Village Phone program, a telecommunications company makes a concerted effort to target the rural market nationwide and creates partnerships with multiple local microfinance institutions to target rural clients. The telecommunications company allocates staff, defines the brand, invests in support services, and sets the pricing.
Village Phone Direct uses existing mobile communications products and does not require the full engagement of the telecommunications company. Microfinance institutions directly implement the program, define the local marketing strategy and control all aspects of implementation.
Do you recommend “Traditional” Village Phone or Village Phone Direct for my country?
Grameen Foundation’s ideal is to have a traditional Village Phone program in every country given the strength of the model to sustainably provide affordable telecommunication access in poor, rural communities. However, the reality is that not all markets are ready for the traditional Village Phone program. Village Phone Direct allows microfinance institutions to provide a much needed, and indeed profitable, mobile communications product to their clients and select from which local telecommunications provider to buy the pre-paid vouchers. It also enables microfinance institutions to implement small-scale programs in targeted areas of the country.
Is Village Phone Direct designed for urban or rural markets?
The equipment used in Village Phone Direct will operate in either an urban or rural market. However, we strongly encourage a focus on rural markets. In urban areas, there is usually significant competition for public telecommunication services, making the business more challenging for the microfinance client. In rural areas, especially those where a signal can only be received using the external antenna in the Village Phone Equipment Kit, the business model will be much more favorable and sustainable.
What equipment is in the Village Phone Direct kit?
This “business in a box” includes:
- a. Nokia mobile phone with earpiece
- b. External booster antenna for areas without strong mobile signal coverage
- c. Custom designed cables to connect the phone to the antenna and the recharging equipment such as a automobile battery or a solar panel
To complete the Village Phone Equipment Kit for the microfinance client, a SIM card and prepaid airtime will also be needed and can be purchased through regular outlets. Additional items such as signage and marketing material may be produced by the microfinance institution.
How much does the kit cost?
The Village Phone Business Kit´s price depends on the local prices and taxes and whether the external antenna and/or charging equipment is needed. Microfinance institutions can add additional items (such as signage and marketing material) and independently determine the price for their clients.
What will the program be called in my country?
Each microfinance institution can define their own local name for the product.
Is the Village Phone Direct kit sold exclusively to microfinance institutions?
The equipment will not be sold exclusively to microfinance institutions. However, microfinance institutions have an inherent competitive advantage in rural markets given their extensive networks, longstanding community relationships, and ability to provide loans to finance these Village Phone businesses.
What do I need to start a Village Phone Direct program?
The first and most important step is to read the detailed Village Phone Direct manual from Grameen Foundation. This document has been created by the experienced Village Phone team at Grameen Foundation's Technology Center to help you assess the viability of Village Phone Direct for your organization, clients, and particular environment and guide you through the process of establishing Village Phone Direct as a successful product in your portfolio. Grameen Foundation, as a leader in and champion of the replication of the global replication of Village Phone is also available to assist you in your efforts.
The basics steps outlined in the manual are:
1. Make an institutional commitment to the program including allocating staff
2. Survey to assess demand and create business model
3. Determine final components and sources for items in the Village Phone Equipment Kit
4. Procure all items and set pricing for the Village Phone Equipment Kit and corresponding loans
5. Educate clients about the program
6. Conduct pilot program
7. Refine operational processes and business model
8. Expand the program to all clients
Village Phone Direct is described in detail in Grameen Foundation’s “Village Phone Direct” manual, and is available by contacting: VPD@grameenfoundation.org.
Our major supporters include Nokia, the International Telecommunications Union, and David and Susan Russell.
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Grameen Foundation : What we do : Technology Programs : Village Phone Direct : FAQ Village Phone Direct
Grameen Foundation uses microfinance and innovative technology to fight global poverty and bring opportunities to the world's poorest people. With tiny loans and financial services, we help the poor, mostly women, start businesses and escape poverty. Our global network of 55 microfinance institution (MFI) partners including our Growth Guarantee partners has touched more than 34 million people in 24 countries. In addition, we introduced and now sustain technology initiatives (Mifos and Village Phone) in Cameroon, Kenya, Rwanda, and Uganda, bringing our total country outreach to 28.
+1-202-628-3560 www.grameenfoundation.org
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