"Grameen Bank has an impact on the poor, Grameen Phone on the entire economy", says Muhammad Yunus (Nobel Prize).

The project "Community Microtelcos: Telecommunications and Microfinances for The Poor and The Poorest" will provide rural families in the Andes of Peru with access to telecommunications and microfinancial services in their communities for the first time.

Financial Assumptions of the System

Companies like Telefonica, the dominant provider here, or Telmex dominate latinamerican markets. The companies make a tremendous profit on their pre-paid airtime services, but at the same time give a critical service to many of latinamerican’s lowest-income consumers.

Our inspiration is the notable story of Grameen Phone, a billion-dollar phone company in Bangladesh built to serve the communication needs of that country’s millions of low-income residents, and its synergy with Grameen Bank, the world’s first microfinance institution founded by Nobel Prize-winner Muhammad Yunus.

Open source projects, co-developed by thousands of programmers, and shared through creative licensing which demands covenants of behavior rather than financial consideration from the licit community of users, have transformed the information and communications technology (ICT) sector. Examples of such projects include the famous Linux operating system, the Apache web server, databases such as MySQL, the Firefox web browser, and the Meraki wireless router.

The exponential growth of mobile technology opens new possibilities for microfinances. Billions of peoples don't have access to basic financial services but increasingly have access to cell phones and other mobile devices. It represents an untapped market and potentially huge client base for financial institutions.

The microtransactions poor people need are much more expensive than large retail transactions that financial institutions typicaly manage. But new technologies may make it possible to reduce substantially the cost of serving poor customers.

Telecommunications networks and services are not effectively reaching the poor, particularly those living in rural areas. Public subsidies for traditional operators to cover the difference between tariffs and cost-recovery levels have proved limited in addressing this continuing gap.

Community Microtelcos are small-scale telecom operators that combine local entrepreneurship, community empowerment, innovative business models, and low-cost technologies to offer ICT services in areas of little interest to traditional operators.