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San Jose Mercury News, Sat, Nov. 15, 2003


Internet fights poverty in India

Rural Poor Tap Economic Benefits


By Karl Schoenberger

Mercury News


RAMACHANDRA NAGAR, India - The communal water spigot was drying up on Mrs. Gowri’s lane, and she was frustrated because water authorities ignored her complaints. Then, Jancy Rani brought her computer to this parched village in southern India’s Tamil Nadu state.

After paying a small fee, Gowri watched Rani peck out an e-mail to the district water department. The next day, Gowri’s tap started gushing water again, two hours a day. She spread the word that Rani could get things done with her new machine.

Rani, a 20-year old computer entrepreneur, is on the front lines of an ambitious effort to use technology to fight Indian poverty. Her brightly painted storefront jumps out on the village’s dusty market street with signs advertising the computer services she offers: Internet browsing, e-mail and “e-government.”

“I thought I could contribute to society by using computers. That’s my motive,” said Rani, who did not forget a childhood dream of becoming a social worker when she took a six-month computer technology course to qualify for a program that grants small loans to women entrepreneurs.

Aid projects aimed at combating the isolation of rural poverty with computers and information technology have multiplied across developing countries in recent years. The philosophy behind them says that access to information is in itself a powerful force that can bring concrete economic and social benefits.

The non-profit Grameen Technology Center in Seattle and two Indian partners launched the village computing study in Tamil Nadu at the beginning of August, and say the performance of its six female entrepreneurs has exceeded expectations.

Hard to turn profit

Most “e-poverty” experiments are subsidized by government agencies and the non-profit charitable groups that create them. Even private kiosk operators like Drishtee Dot Com, the small New Delhi company that provides technology for the Grameen program, must expand their networks of kiosks to make profits.

The majority of India’s 1 billion people remain un-wired and hobbled by widespread illiteracy and poverty. Before computers can make a significant impact on their lives, experts say, access to the kind of computer services Rani offers must penetrate India’s vast rural areas. And villagers have to be willing to pay for it.

Rani’s new business got off to an encouraging start, grossing about $110 in its first month. The program’s e-government service was a hit. For fees of 45 to 90 cents, customers filed e-mail grievances and downloaded applications for social service programs.

Grameen program

Her kiosk is one of six that the Grameen program installed in different villages in the rural corridor between the cities of Madurai and Trichy (Tiruchirappalli) in central Tamil Nadu. In an expansion of the women-only experiment, 14 more entrepreneurs were scheduled to go online in December in other overpopulated villages dotting this semiarid landscape of cotton fields and rice paddies.

But it’s too soon to tell whether the computer kiosk experiment can replicate itself across one of India’s poorest states, where Grameen estimates 20 million people—a third of the population—live below the poverty line.

India has earned a reputation for high-technology prowess with its burgeoning software industry and its emergence as a global service center providing skilled low-wage labor to companies moving call centers and back-office operations overseas. But even as the information technology sector grows, it still accounts for a thin slice of a predominantly agrarian economy -- 3.2 percent of gross national product. Less than 1 percent of Indians use the Internet.

The information technology sector alone can’t ease India’s poverty, economists say, unless technology is used to connect people in rural areas. Experiments show that a computer in the hands of a farmer allows him to monitor commodity markets and make informed decisions in planting and harvesting.

Cutting red tape

At the village level, a computer enables people like Gowri to leapfrog the notorious sloth and petty corruption of India’s bureaucracy.

In addition to the Grameen program that provided Rani’s computer, several state governments have launched e-governance experiments since 2000, installing PC kiosks in selected villages that provide farmers with access to land records for a modest fee as well as other public services. A research team at the Indian Institute for Technology’s campus in Chennai (formerly Madras) started N-Logue, a company that operates about 250 village computer kiosks in northern India using wireless technology—a costly way to overcome primitive land lines.

Another example is E-Choupal, an online agricultural marketplace run by the Indian conglomerate ITC (formerly the Indian Tobacco Co.). ITC manages a network of thousands of growers with communal PCs installed in farmers’ homes; now Punjabi peasants check commodity prices on the Chicago Board of Trade.

Drishtee, Grameen’s technology partner in Tamil Nadu, operates a for-profit network of 300 rural computer kiosks in northern India. Company founder Satyan Mishra predicts 60 percent of India’s villages will be connected in the next five years with at least one computer kiosk run by Drishtee or its competitors. The Hindi word drishtee, he notes, means “vision.”

Urban experiment

The effort to spread village computer kiosks took inspiration from the “hole in the wall” experiment by Sugata Mitra, head of research at NIIT, an IT training company in New Delhi. Mitra installed a high-powered computer in the wall of a neighboring slum in 1999 and studied children playing with the touch-screen and mouse. He was astonished by the results. The 7- and 8-year-old boys who flocked to the curious machine quickly taught themselves to use paint programs and play games on an English-language screen they could not read.

Mitra has installed dozens more hole-in-the-wall computers in other urban slums, suggesting the power of computing can penetrate India’s 35 percent illiteracy rate and become a vital tool for education.

But these experiments will not make much of a dent on poverty and malaise until the entrepreneurs who operate village computing franchises can stand on their own, and others follow suit.

“If it’s profitable, you can reproduce it on a larger scale,” said Allen Hammond, head of innovation and special projects at the World Resources Institute, a Washington organization that analyzes technology-based aid programs. “And that means it doesn’t depend on government subsidies or grants.”

Peter Bladin, a retired Microsoft executive who directs the Grameen Technology Center, said the key to success is energizing the kiosk entrepreneurs with the profit motive. “This is a way to bridge the digital divide to include poor people not just as users, but as owners,” he said.

The Grameen program is already demonstrating some catalytic effects.

“We probably would have started a business like this eventually, but the micro-finance and the training from the program got us off to an early start,” said Janar Thanam, a retired health inspector in the village of Thuvarankurichi whose two daughters run a storefront shop with four PCs.

Educating children

Senthil Rani, 24, and her younger sister Vijaya Santhi, 22, who obtained their first PC through Grameen, said the family talked about opening a computer shop for two years before making the leap. They bought the other three computers with cash borrowed against their father’s retirement fund, and use them for computer education classes they offer to young children.

“My goal is to help people around here who are ignorant about computers,” said Santhi, pointing out that public school children do not get access to computers until 12th grade.

In a promising sign of the potential spread of rural PC kiosks, her family already has plans to extend their franchise to surrounding villages. “We want to teach all the children to use them,” Santhi said. “Maybe next year we’ll need 40 computers, not just four.”

Contact Karl Schoenberger at kschoenberger@mercurynews. com or (415) 477-2500.     

© 2003 Mercury News. All Rights Reserved (Fair Use Doctrine applies)



San Jose Mercury News

Sat, Nov. 15, 2003            


Battling their way out of poverty


SOMERASAMPETTAI, India - Thirty women dressed in colorful saris circled a large rug on a recent Monday morning to perform a weekly ritual of micro-finance in rural India. Before counting their wads of worn 10- and 20-rupee notes, they broke into song.

They sang about the social oppression of women, vowing to “raise our voices to the sky.” Then they pledged to follow the rules of the loan program, to work for the welfare of the community and to practice thrift and frugality.

Each represented a cluster of five borrowers in a 60,000-woman network managed by Activists for Social Alternatives, the local partner in Grameen Technology Center’s village computing program. These women borrowed for simple enterprises such as flower stalls and home bakeries, not high-tech kiosks. But the hope is that the same financial structure can seed PC businesses.

ASA has worked in the region—particularly among the Dalit or untouchable caste—for more than 10 years and has $6.3 million in outstanding loans to 57,440 entrepreneurs. The $200 to $300 loans are on one-year terms at 15 percent interest. While the rate may seem high, these borrowers have no other access to credit. The non-performing loan rate is remarkably low—less than 2 percent.

ASA follows the micro-finance model innovated by the Grameen Bank in Bangladesh, loaning only to women, even if their menfolk run the family business. The idea is that rural women are a dynamic resource, and tend to be more responsible than men.

Participants in the village computing program borrow about $1,000 over a five-year period, but the terms are the same as ASA’s one-year loans.

Jancy Rani’s loan covered most of her hardware—a PC with a Celeron chip running Windows 98, a three-in-one printer, fax and scanner, and a backup generator. Her father, a driver at a nearby college, borrowed against his pension for the few hundred dollars needed for start-up costs. Rani dreams of expanding her business with four more computers.

·       Karl Schoenberger