Grameen Foundation partners with local Microfinance Institutions in Rwanda to Relaunch Village Phone Initiative

The Grameen Foundation, a non-profit organization that tries to replicate the Grameen Bank microfinance model around the world through a global network of partner microfinance institutions, is relaunching its Village Phone initiative in Rwanda in collaboration with MTN Rwanda (a telecommunications company). The project, called Village Phone Rwanda Tel’imbere has four local microfinance institutions (MFIs) as partners. The project was initially launched in 2006, after a successful pilot scheme had run for a year.

The four partner MFIs in Rwanda lend money to clients so they can buy the telephony equipment that allows them to start village phone businesses. They are Urwego, which began its operations in July 1997 as World Relief’s microfinance program in Rwanda and has grown to be one of the predominant MFIs in East Africa. According to the MixMarket, Urwego has Total Assets of USD 1.9million, a Return on Assets of -18.54% and a Debt to Equity Ration of 16.82%. The others are The Vision Finance Company, part of World Vision, with over 23,000 clients in Rwanda, CARE Rwanda and, Duterimbere, which began partnering with the Grameen Foundation in early 2007.

Once the equipment has been purchased, Village Phone Rwanda Tel’imbere provides special airtime rates to the Village Phone Operators (VPOs), who can set up their services in areas where electricity is unavailable. About 50 Rwandans took part in the one-year pilot program and operators will soon be available in 14 of Rwanda's 30 districts.

Village Phone initiatives in Bangladesh and Uganda have already proved successful. The phone service becomes an economic and social lifeline to villages and the income from running the phone also enables the VPO to repay the original loan and establish a viable business for their family, often giving them an income three times in excess of the national average. There are now 293,000 VPOs in Bangladesh and Village Phone Rwanda expects to create 3,000 new operators and businesses in Rwanda over the next three years.

To learn more about this author, visit David Satterthwaite's Website.

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