The neat red-brick path to Tingaon leads over an earthen berm, skirting fish ponds and rice paddies. It passes under mango trees and close by well-worn backyards that children share with chickens, ducks and water buffalo. Straw lies scattered across the way, left to dry where it can drain if an afternoon rain should fall.
Despite its timeless appearance, Tingaon is different from nearly all of Bangladesh's 85,000 rural settlements. It is not the power cable, loosely hung from tree to tree, that makes Tingaon different: In this relatively prosperous Narayanganj district, not far from the capital, Dhaka, the number of villages that have electricity is above the 20-percent national average. Nor is the fact that many of Tingaon's native sons are working overseas much of a distinction: So do some two million other Bangladeshis.
The difference becomes audible when an electronic jingle penetrates the afternoon air, sounding quite out of place among the natural sounds of the village. Fifty-five-year-old Hajera Begum answers her cellular phone like a seasoned long-distance operator. "Hello. Hello. Yes, Paribanu is at home. I saw her there not long ago. Call again in 10 minutes after I go to her." What sets Tingaon apart is the availability of telecommunications, complete with clear connections, modest prices for local and international calls, and even door-to-door service.
Hajera Begum is a "phone lady" in an innovative program established by Grameen Bank, the 23-year-old Dhaka institution whose pioneer work in "micro-enterprise" among the poor has revolutionized development financing and development philosophy around the world. Now well into a pilot program, over the next few years Grameen hopes to make cellular phones, fax lines, e-mail and Internet services available throughout Bangladesh's countryside, and in so doing utterly revolutionize the way rural Bangladesh communicates with the rest of the world.
The bank is boldly trying to vault a nation of villages over the copper-wire stage of communications, bringing satellite technology to residents who never had conventional telephone service because of the prohibitive cost of installing the necessary infrastructure.
Given its history, this is a natural move for Grameen Bank, which over the past two decades has extended some $2.4 billion in loans, whose principal amount averaged a minuscule $100 each, to more than 2.3 million rural Bangladeshis. More than 90 percent of Grameen's borrowers are women, and the loans enable them to buy productive assets: milk cows, sewing machines, fishing nets and, lately, cellular telephones, which they operate like public phone booths for their neighbors.
Grameen was founded in 1976 by Muhammad Yunus, then a Chittagong University economics professor who one day happened to meet a market vendor unable to buy 25 cents worth of cane that she needed to make a product she could sell. When he asked why she didn't apply for a bank loan, she laughed, and Yunus quickly saw her point. In the view of commercial bankers, bigger loans are better loans. Small loans cannot turn a profit, according to the conventional wisdom, and very small loans are not even worth considering.
Yunus lent the woman 25 cents out of his own pocket. Then he did an informal survey in her village. To his surprise, he found more than 40 small-business people—vendors, farmers, artisans— who said they could benefit from a loan, and the average amount. they said would be useful was less than a dollar. From this experience was born the idea of microcredit—and the notion that access to credit should be recognized as basic human right.
Since then, Grameen has been the guiding light of the microcredit movement, and its poverty-fighting successes have won over governments in both industrialized and developing countries, nonprofit institutions across the globe, and international organizations such as the World Bank, the United Nations Development Program and the International Fund for Agricultural Development. Yunus has been awarded the World Food Prize for Grameen's agricultural loans and the Aga Khan Prize for its low-cost housing loans. In the 1980's, Bill Clinton, then governor of Arkansas, asked Yunus to help him start a Grameen-style fund in his state, and in 1996, Hillary Clinton met with Grameen borrowers when she visited Bangladesh.
At the second international MicroCredit Summit conference in New York last June, chaired by Peruvian president Alberto Fujimori and World Bank president James Wolfensohn, delegates from 100 countries adopted the goal of extending microloans to 100 million poor people worldwide by 2005. For its part, Grameen signed up to reach 10 million of them by replicating its Bangladesh programs in other Asian countries.
While experts agree that the dynamism of entrepreneurship and self-employment is most easily tapped in traditional rural enterprises such as crafts and agriculture, Yunus does not want that to limit people's imaginations. "Why not go high-tech in the villages?" he asks. "Telecom, the Internet, data processing—we're ready for it all.
"Technology today is different from what it was yesterday," he continues. "It's no longer the same inert hardware it was for first-generation users. Now it's more like malleable clay, ready to be shaped at will. PC's have been trickling into South Asia for a decade, and many people still see them as toys. But cell-phones have been put to serious use overnight. And that technology is just the tip of the digital iceberg."
Yunus believes strongly enough in rural high-tech to have founded Grameen Telecom, Grameen Communications and Grameen Shakti, which will introduce cellular phones, the Internet and renewable energy services respectively. (Grameen means "village"; shakti means "power.") Like Grameen's other specialty lines of business, which include fish farming and hand-loomed textiles, these three start-ups rely on private-sector banking principles: making loans at market rates of interest, insisting on full repayment, and maintaining professional standards in all respects.
Grameen has found that the borrowers gain self-confidence and a broader world view, Yunus says. Being a full, paying customer gives one the right to receive good service and good value, and that certainty of entitlement displaces the supplicant, even cringing, hope of good treatment that is common among the very poor.
"We are a bank," insists Yunus, "not a development project. We give loans, not charity." Grameen's close tracking of every loan, its insistence that every borrower should be part of a local group of borrowers, and its astonishing 98-percent repayment rate testify to that.
Hajera Begum knows all about Grameen's strict accounting and her responsibility to the bank. Her phone loan, which bought a Finnish-made handset and battery charger, a stop watch, a calculator and an advertising signboard, came to more than $400, which she will repay over three years in weekly installments of five dollars each. The principal amount of this loan amounted to about four times that of a milk-cow loan, which is the most frequent purpose of Grameen loans. Eligibility for a phone loan thus requires a credit history: The borrower must have received and paid off at least three previous loans.
A joint venture between Grameen and international partners owns and operates the phone system itself. Phone owners such as Hajera are billed four cents a minute for outgoing local calls and about one dollar a minute for international calls. Incoming calls, whether international or domestic, are not billed.
To turn a profit, Hajera doubles the outgoing charges to her customers, whose calls she times with the stopwatch and writes into a logbook. Incoming calls she handles as she did the call to her neighbor Paribanu, either taking the phone to the person's home or sending a child to fetch them, then waiting for the callback. For this service she might charge a flat rate of 10 or 20 cents, depending upon how far she or the messenger had to walk to find the person called.
Hajera Begum's head for numbers does not stop at call rates. She is slowly filling her personal telephone directory with important phone numbers, including the office of her administrative subdistrict, or thana, the police station, the infirmary, and even the citizens' inquiry line of Prime Minister Shaykhah Hasina.
"Yes, the prime minister herself," she insists with a shy smile. "My son thought her number would be good to have, so he asked for it at a political rally. The party official in charge must have thought it was a joke to give an eighth-grader his prime minister's telephone number. And no, I have not tried to call. I have had no reason to, yet."
In nearby Bibijura, "phone lady" Ana Bibi's teenage son Salim has been a bit more bold. "I often call our member of parliament. He is a friend of mine," he says. "I know his number by heart." Ana's personal directory includes the numbers of other phone ladies in Narayanganj district. If she has a question about her monthly loan statement or simply wants to chat, she just calls, as naturally as she might before have walked over to a neighbor's house.
Because phone borrowers have already proved themselves to be successful business people, it is not surprising that Ana Bibi once hired a bicycle rickshaw with a loudspeaker to announce her phone service in nearby villages. With only one or two public booths in each thana of roughly 150,000 people, there are plenty of potential customers, and letting them know about her service makes sense.
Bibi also advertises in the local magazine Gemstone. "The world is getting smaller by the day," her copy reads, "ever nearing your grasp. So save time and money with a new village phone. Let us all move forward together." Like many Bengali-language publications, this one shows a high regard for a literary turn of phrase.
That using a Grameen phone saves money is not lost on cotton seller Munir Hussein of Ispalani village in Bundur thana. "I sell scraps from Dhaka's mills to buyers in Rajshahi division," he says, speaking of Bangladesh's northernmost region. "To get there and back I used to travel four days and spend $25 in train fare. But now I can make and get calls from there, and save most of that money and all the time."
Hussein is seconded by furniture maker Ala Uddin, who previously had to travel four hours round-trip to Dhaka just to communicate a simple yes or no to a business proposal. Now Ala Uddin uses the Grameen village phone service to call his partner, who has bought himself a cellular phone through Grameen's higher-margin urban sales division.
But for most, the lack of phone service is still the frustrating norm. Zahira Begum of Polashur village, just across the Buriganga River from Dhaka and within sight of its high-rise buildings, exchanges audio-cassette letters with her brother working in Kuwait. What irks her is not so much that she cannot call him, but that she cannot call Dhaka. "I wish I knew how much they were paying for rice in the market there," she says. "Here we sell to the middleman at whatever price he offers us."
While the rural service is just now getting underway with 250 phones, Yunus expects that five years from now there will be some 50,000 "phone ladies" in a nationwide network. In a country of 120 million people with only 400,000 existing telephone lines, most of which are in the cities, the impact of this change promises to be enormous.
Nazneen Sultana is the head of Grameen's software unit, and he believes villagers will soon be doing more than just working by phone. "Soon I expect to see them at keyboards, doing data processing for international credit-card companies. Many villagers have good English and math skills, so once we get fast Internet connections, we'll be able to underbid other countries currently doing that work offshore. It will definitely be a growth industry for us."
Job creation is at the center of Grameen's push to take high-tech to the countryside. A glance through any one of the phone ladies' logbooks, listing incoming calls from London, New York, the Gulf countries and Japan, reveals one of the harsh consequences of rural unemployment. Throughout Bangladesh, men have left home to seek work in faraway places, struggling against the odds to keep their families intact by means of repatriated earnings and, when possible, phone calls.
More generally, the economic impact of Grameen's rural high-tech policy is evident in its loan program for renewable energy generators. With more than four out of five Bangladeshis living without electricity, and some 60 percent of the country's total energy needs being met by burning cow dung, sales of small solar-power systems are increasingly strong, and biogas plants and wind turbines are being tested.
Dipal Barua, head of the energy unit at Grameen Shakti, sees magic in a light bulb. "People can do with electricity things they could never do with candle wax or kerosene," says Barua: "Study, work, make market sales—all things that, sooner or later, will bring them out of poverty."
In Dhalapara village, half a day's drive north of Dhaka, Grameen branch manager Abdu Salam Khan sold 30 solar energy systems in just four months, and he says that as neighbors see these at work, he is receiving more queries daily. "To light a kerosene lamp for just a few hours costs 25 cents for fuel," he says. "Why not pay half that for electric light all night long?"
Grameen-designed solar systems are very modestly sized, in keeping with their users' needs and wallets. The systems employ imported solar cells, but the charge controllers, fluorescent lamps and eight-watt tubes are all manufactured in Bangladesh. A 17-watt panel costs about $290; the 75-watt array runs $750. On the drawing board is a smaller, one-lamp system that will cost less than $150.
Even with Grameen Bank financing, such prices are still well beyond the reach of many. Even so, there are trickle-down effects: One resident of Dhalapara, Dibon Krishna Shahah, rents power for three bulbs from a neighbor's 75-watt system. "My wife keeps up her tailoring business and my son stays at his school books a few extra hours each night," he says. Sawmill operator Muhammad Abu Hanif installed a 17-watt lighting system, which nets each of his four employees an additional $2.50 a day by extending their working hours.
While Grameen and other microcredit banks in Asia and Latin America can build on two decades of experience, similar institutions in the Middle East and North Africa are relatively new. According to the World Bank, among the approximately 60 microcredit lenders in the region, as yet only two—both in Egypt—have achieved financial sustainability and broad outreach.
Ten Arab countries were represented at the New York MicroCredit summit. Among their delegates was Mostafa Yassin, executive director of microenterprise development at the Credit Guarantee Company, a consortium of five Egyptian banks that lends in the $100-$300 range through local non-governmental agencies. Yassin came out of retirement after a career at the Arab African Bank to take on the familiar task of administering small amounts.
"In many ways it's like going back to my childhood," he says. "I remember as a boy, putting a few piasters into a savings account at the neighborhood postal bank. It was quite a modest amount and it grew very slowly, but nonetheless I learned how a bank helps a community. That is what I want to teach our clients—that borrowing, investing, and saving is a natural thing to do."
One of Yassin's colleagues in Egyptian microfinance is Mohsen Youssef, director of the Ibn Khaldun People's Monetary Fund. Youssef believes that sound, poverty-breaking business practices are not always easy to cultivate among the poor, even though they are highly motivated.
"Training, training, training—that is the key," says this former manpower-planning specialist. "It's easy to give money away but hard to get it back. First-time borrowers always need advice and oversight." Even so, Youssef concedes that the existence of cooperative savings groups in many Arab countries is making microcredit a increasingly familiar concept.
A handful of the Arab microcredit organizations operate under Islamic financial rules. According to Judith Brandsma of the World Bank, one of the most active is run by the Hodeidah Women's Union in Yemen. Structured as a mudarabah, or limited-partnership bank, it makes $100 loans to small-business borrowers, and in effect then becomes a shareholder in the business, entitled to a proportional share of profit or loss. Throughout the region, Brandsma says, the World Bank estimates that some 4.3 million people could benefit from small loans, but at present very few of them can be served through existing financial institutions.
However, Brandsma is among those in the field who think that microcredit, for all its benefits, has been oversold in recent years as a panacea for poverty and an engine for social development. Not everybody is suited to self-employment, she notes and, more to the point, some consequences of poverty—such as malnutrition, poor health and illiteracy—just have to be fought head-on rather than indirectly through job creation.
Yet the residents of Rajabari village in Bangladesh are not quibbling with what Grameen has made possible for them. When an electronic trumpet flourish announces another incoming call, phone lady Jasmeen Begum answers. "Please call back in 10 minutes," she says. "We must go to your wife." Her husband, Khurshad Alam, walks the phone down the dirt lane to the house of Pirooja Munir, whose spouse dutifully rings again from his worksite—in Bahrain.
Pirooja listens intently. A smile finally spreads across her face as she says goodbye. Her husband is coming home soon on leave, she reports. She has his arrival information and will meet him at the airport. But more important, she and her two children and her sister-in-law will be going back to Bahrain with him: The visas have been arranged. "No more worrying now," she says with a sigh of relief. "I'm glad he was able to get through."
Louis Werner is a writer and filmmaker living in New York, and a regular contributor to Aramco World.
Kevin Bubriski lived and worked in Asia for more than eight years, and his photographs have been widely exhibited and collected. He now lives in Vermont.