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Natasha BeschornerNatasha Beschorner

June 5, 2007June 5, 2007

ICT Applications for Rural ICT Applications for Rural Development:Development:

Examples, Enablers, Success Examples, Enablers, Success

FactorsFactors

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OutlineOutline

How can ICT contribute to rural How can ICT contribute to rural economic development?economic development?

Examples, CasesExamples, Cases Critical Success Factors and enabling Critical Success Factors and enabling

environmentenvironment Key questions: roles of government, Key questions: roles of government,

development partnersdevelopment partners

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How can ICT contribute to rural economic How can ICT contribute to rural economic development?development?

Provides access to Provides access to informationinformation benefiting benefiting rural producers and supply chainsrural producers and supply chains• e.g. Market price information, weather, supply chain e.g. Market price information, weather, supply chain

information (e.g. transport and fuel availability), news, information (e.g. transport and fuel availability), news,

Facilitates access to Facilitates access to servicesservices• Financial services, access to credit, funds transfer, savings Financial services, access to credit, funds transfer, savings • Land registration, land use planning/administrationLand registration, land use planning/administration

Facilitates access to Facilitates access to marketsmarkets• E-commerce-direct to customerE-commerce-direct to customer• E-commerce-portals, virtual communitiesE-commerce-portals, virtual communities

Facilitates access to other public services for rural Facilitates access to other public services for rural populations (health, education, government)populations (health, education, government)

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ICT ToolsICT Tools

• Mobile phone (voice, text/SMS)Mobile phone (voice, text/SMS)• Internet via PCInternet via PC• Internet via mobile phone/PDAInternet via mobile phone/PDA• Broadcast media (now via TV, radio; in Broadcast media (now via TV, radio; in

medium-term via mobile phone and medium-term via mobile phone and Internet as a result of convergence)Internet as a result of convergence)

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M-BankingM-Banking

Transfer of credit (airtime) via mobile Transfer of credit (airtime) via mobile phone/SMSphone/SMS

Deposits, savings, loans, payroll, remittance Deposits, savings, loans, payroll, remittance payments, purchases (in participating retail payments, purchases (in participating retail outles), bill payments outles), bill payments

Partnership between mobile operator, Partnership between mobile operator, financial institution; financial regulatorfinancial institution; financial regulator

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M-Banking: Examples 1M-Banking: Examples 1

G-cash, SmartMoney G-cash, SmartMoney Globe, Smart Globe, Smart (Philippines)(Philippines)

Wizzit-MTN (S. Wizzit-MTN (S. Africa)Africa)

Celpay (Zambia)Celpay (Zambia) Safaricom M-Pesa Safaricom M-Pesa

(Kenya)(Kenya) NTT DoCoMo (Japan)NTT DoCoMo (Japan)

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M-Banking: potential benefitsM-Banking: potential benefits To consumers:To consumers:

• Reduces travel time and costs (to travel to Bank branch). In Papua New Reduces travel time and costs (to travel to Bank branch). In Papua New Guinea, teachers may travel 2-3 days by rough road or boat to withdraw Guinea, teachers may travel 2-3 days by rough road or boat to withdraw salariessalaries

• Reduced transaction costs for remittances (1% cash-out for G-cash, compared Reduced transaction costs for remittances (1% cash-out for G-cash, compared to higher rates from Western Union)to higher rates from Western Union)

• Reduced opportunities for fraud, counterfeit and theft by providing a secure Reduced opportunities for fraud, counterfeit and theft by providing a secure electronic mode for transferring funds (as opposed to, for example, travelling electronic mode for transferring funds (as opposed to, for example, travelling long distances to transfer cash); long distances to transfer cash);

To service providers: To service providers: • Reduced direct costs for delivering savings and credit products;Reduced direct costs for delivering savings and credit products;• Reduced errors and increased transparency in the transfer and recording of Reduced errors and increased transparency in the transfer and recording of

loan disbursements and payments and savings deposits;loan disbursements and payments and savings deposits;• Easier record keeping on each client through computerization of transactions Easier record keeping on each client through computerization of transactions

through mobile phones, thus making it easier for financial institutions to tailor through mobile phones, thus making it easier for financial institutions to tailor products and services for segments within their large pool of small customers. products and services for segments within their large pool of small customers.

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M-Banking: Key EnablersM-Banking: Key Enablers Telecom infrastructure (mobile): reliable, Telecom infrastructure (mobile): reliable,

affordable, extensive penetration in rural affordable, extensive penetration in rural areas, and good network qualityareas, and good network quality• Linked to overall telecoms market environment Linked to overall telecoms market environment

(competition, effective regulation)(competition, effective regulation)

Technology: bandwidth, security issuesTechnology: bandwidth, security issues Literacy (“SMS culture”)Literacy (“SMS culture”) Financial sector regulation: consumer Financial sector regulation: consumer

protection, risk management, anti money-protection, risk management, anti money-launderinglaundering

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Market Price InformationMarket Price Information

Formal or informal transmission of price and other Formal or informal transmission of price and other information between markets and producersinformation between markets and producers

Production and dissemination of market intelligenceProduction and dissemination of market intelligence Can be top-down (govt, private sector) or bottom-up Can be top-down (govt, private sector) or bottom-up

(private sector, individual)(private sector, individual) Reduces price instability and intermediation costs Reduces price instability and intermediation costs

for producersfor producers Expands market opportunitiesExpands market opportunities

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Examples—Market Information 1Examples—Market Information 1

Manobi (Senegal, Manobi (Senegal, Uganda, S. Africa). Uganda, S. Africa). Producer price Producer price information via information via SMS. Recently also SMS. Recently also emergency rescue emergency rescue capability (using capability (using GPS). GPS).

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Examples: Market Information-2Examples: Market Information-2

Sri Lanka: Govi Gnana (Farmer Knowledge)-Sri Lanka: Govi Gnana (Farmer Knowledge)-developed by govtdeveloped by govt

Philippines: B2B Price Now (Internet)Philippines: B2B Price Now (Internet) Ghana TradeNet (Internet)Ghana TradeNet (Internet) Warana (India)Warana (India) Senegal: Manobi (mobile phone, PDA)Senegal: Manobi (mobile phone, PDA) Bangladesh: Grameen Village Phone (mobile)Bangladesh: Grameen Village Phone (mobile) India: eChoupal (Internet)India: eChoupal (Internet) India: Kerala fishermen (mobile phone)India: Kerala fishermen (mobile phone)

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Examples—online extension Examples—online extension serviceservice

Technical Assistance/Extension Service through VideoconferencingBecause India is a land of many languages, a purely text based system of advice online (as Chile’s Redsercotec) would be impractical. Instead, n-logue’s provision of technical advice using ICTs uses a low bandwidth videoconferencing application developed by IIT Madras and commercialized by Oops (www.oops-india.com/), as well as through the exchange of highly compacted videoclips.

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Market Price Information: Key Market Price Information: Key EnablersEnablers

Affordable, reliable telecoms Affordable, reliable telecoms infrastructure:infrastructure:• Mobile telephonyMobile telephony

• Internet (via PC or mobile/GPRS, 3G)Internet (via PC or mobile/GPRS, 3G)

Content management: information Content management: information quality, relevance, timely updatesquality, relevance, timely updates

HR: capacity to deliver servicesHR: capacity to deliver services

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Examples: Land Information Examples: Land Information Systems Systems

Cadastral informationCadastral information Land use planning, GISLand use planning, GIS Environmental managementEnvironmental management Tax collectionTax collection Disaster managementDisaster management Property registrationProperty registration

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Examples: Land Information Examples: Land Information SystemsSystems

India: Bhoomi land records computerizationIndia: Bhoomi land records computerization Guatemala land administrationGuatemala land administration Panama: digital registryPanama: digital registry India, GyandootIndia, Gyandoot Thailand: computerised land regisationThailand: computerised land regisation Vietnam: Bac Ninh LISVietnam: Bac Ninh LIS Philippines: LAMP, LARESPhilippines: LAMP, LARES

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Land Information: Key EnablersLand Information: Key Enablers

Infrastructure: affordable, reliable, Infrastructure: affordable, reliable, access to Internetaccess to Internet• Rural broadbandRural broadband

Institutional and legal reforms: Institutional and legal reforms: --business process change, incentivesbusiness process change, incentives

Institutional coordination (registration, Institutional coordination (registration, land valuation, mapping, taxation)land valuation, mapping, taxation)

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Key QuestionsKey Questions How well connected are rural populations, and what How well connected are rural populations, and what

policy changes are needed to improve rural connectivity? policy changes are needed to improve rural connectivity? How can high-value information applications be How can high-value information applications be

mobilized and scaled-up to improve rural productivity, mobilized and scaled-up to improve rural productivity, livelihoods and living standards ?livelihoods and living standards ?

How much capacity building is required for rural areas How much capacity building is required for rural areas to create a society of producers of local knowledge and to create a society of producers of local knowledge and of users of that knowledge? of users of that knowledge?

How can government efforts to promote rural How can government efforts to promote rural development – in various forms – and to develop rural development – in various forms – and to develop rural infrastructure be more closely integrated, conceptually, infrastructure be more closely integrated, conceptually, institutionally and in practice? institutionally and in practice?

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Rural ICT Applications: CSFsRural ICT Applications: CSFs Low-cost, reliable communications Low-cost, reliable communications infrastructureinfrastructure, ,

available in rural areas:available in rural areas:• Mobile phone networksMobile phone networks• BroadbandBroadband• Private investmentPrivate investment

Supportive and effective Supportive and effective legal/regulatory frameworklegal/regulatory framework• Competitive telecoms marketsCompetitive telecoms markets• Effective regulation: consumer protection, tariffs, spectrum, Effective regulation: consumer protection, tariffs, spectrum,

interconnectioninterconnection• Universal Service/Access policies (stimulating rural access)Universal Service/Access policies (stimulating rural access)

ICT ICT skillsskills: : • information systems management, content development, training information systems management, content development, training

at village level (users, operators)at village level (users, operators) Broader institutional developmentBroader institutional development

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Telecoms Infrastructure TrendsTelecoms Infrastructure Trends

Rapidly increasing access to mobile, Rapidly increasing access to mobile, particularly in urban areas, but increasingly particularly in urban areas, but increasingly in rural as urban markets saturatein rural as urban markets saturate

Lower costs of coverageLower costs of coverage New technologies and convergence (mobile New technologies and convergence (mobile

Internet, GPRS, 3G, IPTV)Internet, GPRS, 3G, IPTV) Next wave: Next wave: rural broadband rural broadband (investment in (investment in

fibre-optic backbones)fibre-optic backbones)

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Access to TelecommunicationsAccess to Telecommunications

Basic ICT Indicators in Selected EAP Countries, 2004, 2005

 

IDA Countries Lower Middle Income

      Upper Middle Income

  Lao PDR Cambodia PNG Vietnam Indonesia Philippines China Thailand

Adult literacy (%) 68.7 73.6 57.3 90.3 90.4 92.6 90.9 92.6

Telephones/100 1.27 0.26 1.21 18.81 5.73 4.16 26.63 10.95

Teledensity in largest city 27867 21000 .. .. 2613600 2811144 8895000 3211195

Mobile phones/100 10.77 56.26 0.69 11.39 21.06 39.5 29.9 42.98

PCs/100 1.69 0.26 6.36 1.26 1.36 4.46 4.08 5.83

Internet users/100 0.42 0.28 2.95 12.72 7.18 5.32 8.44 11.03

Internet cost/month (US$) 18 30 .. 1.68 10.77 9.81 .. ..

ICT as % GDP .. .. .. 13.8 3.1 6.1 5.1 3.9

GDP per capita (US$) 379 339 607 502 904 1088 1323 2356

Source: International Telecommunication Union, World Bank

Note: Data in Italics are from 2004 or a previous year. Data on teledensity in largest city is from 2001.

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Selected Indicators, East AsiaSelected Indicators, East Asia

PopulationPopulation% Illiteracy % Illiteracy

> 15 yrs> 15 yrs

PeakPeakGNI per GNI per capitacapita(2005)(2005)

Cellular Cellular subscribers subscribers

per 100 per 100 people people (2005)(2005)

% % PrepaidPrepaid(2005)(2005)

Mobile Cellular tariffs US$Mobile Cellular tariffs US$(August 2006)(August 2006)

Total Total (millions (millions

2006)2006)

% % <= 19<= 19

% % RurRuralal

MaleMale FemaleFemale

Per minute local call Per minute local call

SMSSMSPeakPeak off-peakoff-peak

CambodiaCambodia 14.414.4 59.859.8 8080 1515 3636 77.777.7 380380 7.57.5 57.957.9 0.120.12 0.110.11 0.030.03

Indonesia Indonesia 225.5225.5 47.247.2 5252 66 1313 52.452.4 1,2801,280 21.121.1 92.692.6 0.110.11 0.090.09 0.010.01

Lao P.D.R.Lao P.D.R. 6.16.1 62.262.2 7979 2323 3939 74.174.1 440440 10.810.8 97.297.2 0.170.17 0.140.14 0.040.04

MalaysiaMalaysia 25.825.8 51.651.6 3333 99 1515 9.39.3 4,9604,960 75.275.2 85.085.0 0.100.10 0.100.10 0.010.01

MyanmarMyanmar 51.051.0 n.d.n.d. 6969 66 1414 n.d.n.d. n.d.n.d. 0.30.3 n.d.n.d. n.d.n.d. n.d.n.d. n.d.n.d.

PhilippinesPhilippines 84.584.5 54.654.6 3737 77 77 47.547.5 1,3001,300 41.341.3 92.092.0 0.130.13 0.130.13 0.020.02

SingaporeSingapore 4.44.4 28.928.9 00 33 1111 n.d.n.d. 27,49027,490 100.8100.8 36.736.7 0.140.14 0.140.14 0.030.03

ThailandThailand 64.864.8 37.837.8 6868 55 99 25.125.1 2,7502,750 43.043.0 51.851.8 0.050.05 0.050.05 0.080.08

Timor-Timor-LesteLeste

1.01.0 n.d.n.d. 7474 n.d.n.d. n.d.n.d. n.d.n.d. 750750 n.d.n.d. n.d.n.d. n.d.n.d. n.d.n.d. n.d.n.d.

Viet NamViet Nam 85.385.3 48.348.3 7474 66 1313 n.d.n.d. 629629 11.411.4 80.580.5 0.150.15 0.150.15 0.020.02

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Telecoms access in the PacificTelecoms access in the Pacific(% of population)(% of population)

FixedFixed MobileMobile Internet*Internet*(mostly dial-up; (mostly dial-up; some broadband some broadband wireless or WiFi “in wireless or WiFi “in cities; limited DSL)cities; limited DSL)

PNGPNG 1.01.0 2.02.0 2.02.0

Timor-LesteTimor-Leste <0.5<0.5 0.50.5 <0.5<0.5

Solomon Is. Solomon Is. 1.01.0 1.31.3 <0.5<0.5

SamoaSamoa 10.510.5 35.035.0 4.04.0

FijiFiji 13.313.3 28.028.0 8.08.0

VanuatuVanuatu 3.23.2 8.08.0 3.53.5

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The Access ProblemThe Access Problem

Country

Rural areas / Low-income users

Other urban areas / middle-income users

Capital / High-income users

0

20

40

60

80

100

120

0 800 2000 4000 8500 15000 30000

Per-capita GDP (PPP)

Ho

use

ho

ld p

en

etr

atio

n (

pe

r 1

00

)

Country

Rural areas / Low-income users

Other urban areas / middle-income users

Capital / High-income users

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Addressing the supply gapAddressing the supply gap

Policies and programs to facilitate Policies and programs to facilitate access to telecommunications in rural access to telecommunications in rural areasareas• e.g. universal service policiese.g. universal service policies• Universal service fundsUniversal service funds• BroadbandBroadband

PPPs for investmentPPPs for investment PPPs for service provisionPPPs for service provision

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Extending Access to Rural AreasExtending Access to Rural Areas

Need for increased, mainly private, investment in Need for increased, mainly private, investment in communications infrastructure and servicescommunications infrastructure and services

Market liberalization: phase out monopolies and introduce Market liberalization: phase out monopolies and introduce competition, especially in mobile, Internetcompetition, especially in mobile, Internet

Effective and transparent regulation, in particular greater Effective and transparent regulation, in particular greater balance between capacity of operators (high) and governments balance between capacity of operators (high) and governments (low)(low)

• Fair pricesFair prices• Competitive behaviourCompetitive behaviour• Good governanceGood governance

Rural access: ensuring service to commercially unviable areas Rural access: ensuring service to commercially unviable areas (many of these)(many of these)

Reducing costs of international bandwidth (regional Reducing costs of international bandwidth (regional infrastructure-sharing? Satellite vs cable?)infrastructure-sharing? Satellite vs cable?)

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ICT Skills IssuesICT Skills Issues

ICT-skills needs:ICT-skills needs:• Curriculum relevanceCurriculum relevance

• Academic-industry partnershipsAcademic-industry partnerships

User skills:User skills:• Content developmentContent development

• MaintenanceMaintenance

• Daily useDaily use

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M-Banking: Role of GovtM-Banking: Role of Govt

Stimulate greater competition in both Stimulate greater competition in both telecommunications and banking services. telecommunications and banking services. • Stimulate greater participation from private capital. Stimulate greater participation from private capital.

Support an expansion in rural telephony through Support an expansion in rural telephony through smart subsidies to help private entrepreneurs smart subsidies to help private entrepreneurs develop rural infrastructure. develop rural infrastructure.

Develop a suitable financial regulatory framework Develop a suitable financial regulatory framework for m-banking services. for m-banking services. • Central Bank authorities need to develop a framework that Central Bank authorities need to develop a framework that

protects consumers from undue risks, fraud or crime and ensures protects consumers from undue risks, fraud or crime and ensures that service providers adopt adequate risk management measures; that service providers adopt adequate risk management measures; while at the same time facilitates and encourages innovation in while at the same time facilitates and encourages innovation in financial service development, in particular to better serve rural financial service development, in particular to better serve rural communities. communities.

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M-Banking: Role of Development M-Banking: Role of Development PartnersPartners

Equity investment (IFC)Equity investment (IFC) Encourage involvement of local operators and Encourage involvement of local operators and

commercial banks in the development of their own commercial banks in the development of their own m-banking service platforms m-banking service platforms

Advise financial regulators on regulatory Advise financial regulators on regulatory requirements requirements

TA, training, workshops and seed financing and TA, training, workshops and seed financing and sponsorship of partnerships between sponsorship of partnerships between telecommunications operators, rural banks and central telecommunications operators, rural banks and central bank officials, can help extend the mobile financial bank officials, can help extend the mobile financial services frontier to rural areasservices frontier to rural areas

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Market Info Services-role of govtMarket Info Services-role of govt

Promoting low cost access to mobile phones appear Promoting low cost access to mobile phones appear to be the best way to empower farmers with the to be the best way to empower farmers with the ability to gather market price information from ability to gather market price information from trusted sources that are relevant to their particular trusted sources that are relevant to their particular needs and to reduce intermediation costs and price needs and to reduce intermediation costs and price variability. variability.

There is a role for both Government and donors in There is a role for both Government and donors in helping to develop rural telephony, as well as helping to develop rural telephony, as well as increasing Internet connectivity to expand farmer increasing Internet connectivity to expand farmer access to opportunities to establish new contacts access to opportunities to establish new contacts through email and search for market intelligence through email and search for market intelligence information in the Web. information in the Web.

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Market Info Services: role of devel. Market Info Services: role of devel. partnerspartners

Integrating infrastructure and applications development Integrating infrastructure and applications development support.e.g. support.e.g. Guatemala: Rural Economic Development Guatemala: Rural Economic Development ProgramProgram (World Bank 2006) supports telecommunications (World Bank 2006) supports telecommunications development (50% of total funding), together with development (50% of total funding), together with agricultural marketing and trade (25%), general transportation agricultural marketing and trade (25%), general transportation (25%); and general agriculture, fishing and forestry (5%). (25%); and general agriculture, fishing and forestry (5%).

Indonesia’s Indonesia’s Farmers’ empowerment through agricultural Farmers’ empowerment through agricultural technology and information projecttechnology and information project is an example that is an example that combines support to the country’s extension service with the combines support to the country’s extension service with the delivery, via the Internet and mobile phones, of market delivery, via the Internet and mobile phones, of market intelligence and technical services, and is expected to foster intelligence and technical services, and is expected to foster greater interaction between extension agents, researchers, greater interaction between extension agents, researchers, farmers and traders. farmers and traders.

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Land: role of govt and development Land: role of govt and development partnerspartners

A long term program made up of A long term program made up of adaptable program loansadaptable program loans – as in – as in Thailand, Lao P.D.R., the Philippines, Honduras and El Salvador - Thailand, Lao P.D.R., the Philippines, Honduras and El Salvador - could help expand land administration services and gradually develop could help expand land administration services and gradually develop land information systems. land information systems.

Avoid focusing too much on Avoid focusing too much on sophisticated portals that provide online sophisticated portals that provide online land administration services. Many such portals have been set up only land administration services. Many such portals have been set up only after a long institutional development struggle, the reengineering of after a long institutional development struggle, the reengineering of procedures and significant legislative changes. procedures and significant legislative changes.

To increase understanding among decision-makers and project To increase understanding among decision-makers and project planners, planners, studies, workshops and exchanges of staffstudies, workshops and exchanges of staff on land on land information systems approaches, specialized land information information systems approaches, specialized land information systems topics and Internet service requirements could be very systems topics and Internet service requirements could be very productive. productive.

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Ducts, Masts, Poles, Co-location Sites,

Dark Fibre

UserDomain

Operator & ServiceProvider Domains

Passive InfrastructureProviderDomain

Broadband Backbone Networks

Content, Services, Applications, Customer Care

Access Devices

Multiple responses at different levels

Access Networks – Last Mile

PassiveInfrastructureProviders (e.g.Wireless Tower Companies)

Carrier’scarrier

Retailoperators

Service &Contentproviders

Vendors &retailers

Open Access and OBA being explored

PPPs and Open Access Model, e.g. Andra Pradesh

Universal Service Funds and Output-Based Aid

Demand aggregation, e-government programs, e-gov outsourcing

Telecenters, Micro-finance schemes, e.g. Grameen

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Further Issues for DiscussionFurther Issues for Discussion

Roles of public, private sectors, Roles of public, private sectors, development partnersdevelopment partners

More holistic view of “rural ICT”: More holistic view of “rural ICT”: infrastructure, HR, value-added infrastructure, HR, value-added applications.applications.