When a Cell Phone is Like a Cow
Monday, April 9, 2007
Grameen Bank has an impact on the poor, GrameenPhone on the entire economy,? says Muhammad Yunus. The idea of GrameenPhone was conceived by 36-year-old Manhattan-based venture capitalist Iqbal Quadir in 1993. It was triggered when his computer network crashed, leaving him unproductive.
Concluding that connectivity is productivity, the Wharton business graduate returned soon after to Bangladesh to launch a phone service. At that moment the country had one of the lowest teledensities in the world with one phone for every 500 people.
What followed were years of struggle, frustration and failures. Anything that could go wrong went wrong. The government, funding agencies and investors were not easy to convince. He himself worked out of his home and car without any salary for years.
The Grameen Bank, too, took its own time to get on board. Why cannot a cellular phone be like a cow? A business plan built on this argument managed to convince Yunus finally. Then there was no looking back.The next crucial step was negotiating a partnership between nonprofit Grameen Bank and Norway-based for-profit Telenor and the service was up and running in 1997.
Today GrameenPhone has 10 million subscribers, connects 100 million people through 2,50,000 phone ladies, who buy phones on microloans from the Grameen Bank and lease air time to villagers to make a living after paying off their loans. Today a phone lady earns on an average $750 a year, which is double the average annual income of a Bangladeshi. GrameenPhone has revenues of $1 billion and annual profits of $200 million.
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Source: The Financial Express (India) (link opens in a new window)
