ICT Applications for Rural Development: Examples, Enablers, Success Factors

1. Natasha Beschorner June 5, 2007 ICT Applications for Rural Development:Examples, Enablers, Success Factors

2. Outline • How can ICT contribute to rural economic development? • Examples, Cases • Critical Success Factors and enabling environment • Key questions: roles of government, development partners

3. How can ICT contribute to rural economic development? • Provides access to information benefiting rural producers and supply chains • e.g. Market price information, weather, supply chain information (e.g. transport and fuel availability), news, • Facilitates access to services • Financial services, access to credit, funds transfer, savings • Land registration, land use planning/administration • Facilitates access to markets • E-commerce-direct to customer • E-commerce-portals, virtual communities • Facilitates access to other public services for rural populations (health, education, government)

4. ICT Tools • Mobile phone (voice, text/SMS) • Internet via PC • Internet via mobile phone/PDA • Broadcast media (now via TV, radio; in medium-term via mobile phone and Internet as a result of convergence)

5. M-Banking • Transfer of credit (airtime) via mobile phone/SMS • Deposits, savings, loans, payroll, remittance payments, purchases (in participating retail outles), bill payments • Partnership between mobile operator, financial institution; financial regulator

6. G-cash, SmartMoney Globe, Smart (Philippines) Wizzit-MTN (S. Africa) Celpay (Zambia) Safaricom M-Pesa (Kenya) NTT DoCoMo (Japan) M-Banking: Examples 1

7. M-Banking: potential benefits • To consumers: • 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 salaries • Reduced transaction costs for remittances (1% cash-out for G-cash, compared to higher rates from Western Union) • Reduced opportunities for fraud, counterfeit and theft by providing a secure electronic mode for transferring funds (as opposed to, for example, travelling long distances to transfer cash); • To service providers: • Reduced direct costs for delivering savings and credit products; • Reduced errors and increased transparency in the transfer and recording of loan disbursements and payments and savings deposits; • Easier record keeping on each client through computerization of transactions through mobile phones, thus making it easier for financial institutions to tailor products and services for segments within their large pool of small customers.

8. M-Banking: Key Enablers • Telecom infrastructure (mobile): reliable, affordable, extensive penetration in rural areas, and good network quality • Linked to overall telecoms market environment (competition, effective regulation) • Technology: bandwidth, security issues • Literacy (“SMS culture”) • Financial sector regulation: consumer protection, risk management, anti money-laundering

9. Market Price Information • Formal or informal transmission of price and other information between markets and producers • Production and dissemination of market intelligence • Can be top-down (govt, private sector) or bottom-up (private sector, individual) • Reduces price instability and intermediation costs for producers • Expands market opportunities

10. Manobi (Senegal, Uganda, S. Africa). Producer price information via SMS. Recently also emergency rescue capability (using GPS). Examples—Market Information 1

11. Examples: Market Information-2 • Sri Lanka: GoviGnana (Farmer Knowledge)-developed by govt • Philippines: B2B Price Now (Internet) • Ghana TradeNet (Internet) • Warana (India) • Senegal: Manobi (mobile phone, PDA) • Bangladesh: Grameen Village Phone (mobile) • India: eChoupal (Internet) • India: Kerala fishermen (mobile phone)

12. Technical Assistance/Extension Service through Videoconferencing Because 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. Examples—online extension service

13. Market Price Information: Key Enablers • Affordable, reliable telecoms infrastructure: • Mobile telephony • Internet (via PC or mobile/GPRS, 3G) • Content management: information quality, relevance, timely updates • HR: capacity to deliver services

14. Examples: Land Information Systems • Cadastral information • Land use planning, GIS • Environmental management • Tax collection • Disaster management • Property registration

15. Examples: Land Information Systems • India: Bhoomi land records computerization • Guatemala land administration • Panama: digital registry • India, Gyandoot • Thailand: computerised land regisation • Vietnam: Bac Ninh LIS • Philippines: LAMP, LARES

16. Land Information: Key Enablers • Infrastructure: affordable, reliable, access to Internet • Rural broadband • Institutional and legal reforms: -business process change, incentives • Institutional coordination (registration, land valuation, mapping, taxation)

17. Key Questions • How well connected are rural populations, and what policy changes are needed to improve rural connectivity? • How can high-value information applications be mobilized and scaled-up to improve rural productivity, livelihoods and living standards ? • How much capacity building is required for rural areas to create a society of producers of local knowledge and of users of that knowledge? • How can government efforts to promote rural development – in various forms – and to develop rural infrastructure be more closely integrated, conceptually, institutionally and in practice?

18. Rural ICT Applications: CSFs • Low-cost, reliable communications infrastructure, available in rural areas: • Mobile phone networks • Broadband • Private investment • Supportive and effective legal/regulatory framework • Competitive telecoms markets • Effective regulation: consumer protection, tariffs, spectrum, interconnection • Universal Service/Access policies (stimulating rural access) • ICT skills: • information systems management, content development, training at village level (users, operators) • Broader institutional development

19. Telecoms Infrastructure Trends • Rapidly increasing access to mobile, particularly in urban areas, but increasingly in rural as urban markets saturate • Lower costs of coverage • New technologies and convergence (mobile Internet, GPRS, 3G, IPTV) • Next wave: rural broadband (investment in fibre-optic backbones)

20. Access to Telecommunications

22. Telecoms access in the Pacific(% of population)

23. 120 100 Capital / High-income users 80 Capital / High-income users Household penetration (per 100) 60 Other urban areas / middle-income users Country Other urban areas / middle-income users 40 Country Rural areas / Low-income users 20 Rural areas / Low-income users 0 0 800 2000 4000 8500 15000 30000 Per-capita GDP (PPP) The Access Problem

24. Addressing the supply gap • Policies and programs to facilitate access to telecommunications in rural areas • e.g. universal service policies • Universal service funds • Broadband • PPPs for investment • PPPs for service provision

25. Extending Access to Rural Areas • Need for increased, mainly private, investment in communications infrastructure and services • Market liberalization: phase out monopolies and introduce competition, especially in mobile, Internet • Effective and transparent regulation, in particular greater balance between capacity of operators (high) and governments (low) • Fair prices • Competitive behaviour • Good governance • Rural access: ensuring service to commercially unviable areas (many of these) • Reducing costs of international bandwidth (regional infrastructure-sharing? Satellite vs cable?)

26. ICT Skills Issues • ICT-skills needs: • Curriculum relevance • Academic-industry partnerships • User skills: • Content development • Maintenance • Daily use

27. M-Banking: Role of Govt • Stimulate greater competition in both telecommunications and banking services. • Stimulate greater participation from private capital. • Support an expansion in rural telephony through smart subsidies to help private entrepreneurs develop rural infrastructure. • Develop a suitable financial regulatory framework for m-banking services. • Central Bank authorities need to develop a framework that protects consumers from undue risks, fraud or crime and ensures that service providers adopt adequate risk management measures; while at the same time facilitates and encourages innovation in financial service development, in particular to better serve rural communities.

28. M-Banking: Role of Development Partners • Equity investment (IFC) • Encourage involvement of local operators and commercial banks in the development of their own m-banking service platforms • Advise financial regulators on regulatory requirements • TA, training, workshops and seed financing and sponsorship of partnerships between telecommunications operators, rural banks and central bank officials, can help extend the mobile financial services frontier to rural areas

29. Market Info Services-role of govt • Promoting low cost access to mobile phones appear to be the best way to empower farmers with the ability to gather market price information from trusted sources that are relevant to their particular needs and to reduce intermediation costs and price variability. • There is a role for both Government and donors in helping to develop rural telephony, as well as increasing Internet connectivity to expand farmer access to opportunities to establish new contacts through email and search for market intelligence information in the Web.

30. Market Info Services: role of devel. partners • Integrating infrastructure and applications development support.e.g. Guatemala: Rural Economic Development Program (World Bank 2006) supports telecommunications development (50% of total funding), together with agricultural marketing and trade (25%), general transportation (25%); and general agriculture, fishing and forestry (5%). • Indonesia’s Farmers’ empowerment through agricultural technology and information projectis an example that combines support to the country’s extension service with the delivery, via the Internet and mobile phones, of market intelligence and technical services, and is expected to foster greater interaction between extension agents, researchers, farmers and traders.

31. Land: role of govt and development partners • A long term program made up of adaptable program loans – as in Thailand, Lao P.D.R., the Philippines, Honduras and El Salvador - could help expand land administration services and gradually develop land information systems. • Avoid focusing too much on sophisticated portals that provide online land administration services. Many such portals have been set up only after a long institutional development struggle, the reengineering of procedures and significant legislative changes. • To increase understanding among decision-makers and project planners, studies, workshops and exchanges of staff on land information systems approaches, specialized land information systems topics and Internet service requirements could be very productive.

32. Multiple responses at different levels Access Devices Vendors & retailers User Domain Telecenters, Micro-finance schemes, e.g. Grameen Service & Content providers Content, Services, Applications, Customer Care Demand aggregation, e-government programs, e-gov outsourcing Operator & Service Provider Domains Access Networks – Last Mile Retail operators Universal Service Funds and Output-Based Aid Carrier’s carrier Broadband Backbone Networks PPPs and Open Access Model, e.g. Andra Pradesh Passive Infrastructure Providers (e.g. Wireless Tower Companies) Passive Infrastructure Provider Domain Ducts, Masts, Poles, Co-location Sites, Dark Fibre Open Access and OBA being explored

33. Further Issues for Discussion • Roles of public, private sectors, development partners • More holistic view of “rural ICT”: infrastructure, HR, value-added applications.