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RR RUEHMA RUEHPA
DE RUEHOS #0522 2061505
ZNR UUUUU ZZH
R 251505Z JUL 07
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INFO RUEHZK/ECOWAS COLLECTIVE
RUEHUJA/AMEMBASSY ABUJA 9047
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RHMCSUU/DEPT OF ENERGY WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHDC
RHEFDIA/DIA WASHINGTON DC

UNCLAS LAGOS 000522 
 
SIPDIS 
 
SIPDIS 
 
DEPT PLEASE PASS TO OPIC 
DEPT PLEASE PASS TO TDA 
 
E.O. 12958: N/A 
TAGS: ECON ECPS EIND NI PGOV PREL EINV
SUBJECT: IFC VILLAGE TELEPHONY PROJECT UNDERWAY IN NIGERIA 
 
 
¶1. Summary: The International Finance Corporation would 
create, at a minimum, 1000 businesses for rural women and 
extend mobile phone network coverage to rural areas. The 
Village Phone Project would also expand the capacity of 
microfinance institutions to manage small-scale loans. This 
project was backed by the U.S. Trade and Development Agency. 
End summary. 
 
¶2.  With U.S. Trade and Development Agency (TDA) backing, the 
International Finance Corporation (IFC) of the World Bank has 
begun a Village Phone Project in Nigeria to extend mobile 
phone network coverage to rural areas, provide women 
employment opportunities, and build capacity in microfinance. 
 The IFC and Mobile Telephone Network (MTN), a leading South 
African-based telecom company, partnered on this project, 
which has the potential to offer the telecom giant 
profitable, long-term rewards.  The IFC aimed to create 1000 
"viable businesses" for rural women with experience in 
marketing or small business; a recent pilot project trained 
400 women as distributors.  While the project was beginning 
in Ondo, Delta, Kogi and Enugu, the IFC hoped to expand the 
project to other states.  It has launched similar projects in 
Madagascar, the Democratic Republic of the Congo, Mozambique 
and Senegal.  According to Lauren Rawlings, Project Manager 
of Village Phone Projects at the IFC, rural telephony 
projects are attractive for telecom companies because they 
allow them to bypass government regulations meant to limit 
expansion. 
 
¶3.  Rural areas appropriate for the project are chosen by 
mapping areas where mobile phone reception is poor or 
nonexistent.  MTN then overlays its own map of areas in which 
it is interested in expanding services.  Finally, IFC 
identifies rural communities whose growth rate has the 
capacity to sustain the project for three to five years. 
Other considerations include how active competitors appear to 
be and whether there are microfinance institutions (MFIs) 
available in these areas.  The Growing Business Foundation 
(GBF), IFC's implementer, will train the microfinance 
institutions in how to manage small-scale loans.  In early 
August, GBF will train 70 Nigerian women in basic business 
skills, marketing, customer service, reporting and how to use 
their phone kits. 
 
¶4.  According to Rawlings, one of the project's goals is to 
enable rural women to access MFIs so that as their businesses 
grow, so do their credit lines and subsequently their ability 
to access larger loans.  Microfinance institutions will 
select project participants based on a well-defined set of 
criteria which, Rawlings said, is meant to prevent 
preferential treatment.  Thus, a component of this project is 
to link rural women with MFIs that will enable them to 
purchase project equipment and supplies.  At the same time, 
the IFC hopes to increase the capacity of MFIs and services 
they are able to offer through discussions between the MFIs 
and rural customers about their needs. 
 
¶5.  Rawlings applauded MTN's responsiveness and engagement in 
this social responsibility project, but she anticipated the 
need for greater "business buy-in."  For example, if the 
network is not functional for four days and phone card 
minutes expire after 30 days, distributors will want a credit 
or extension on the life of their phone cards.  The Village 
Phone Project has the potential to expand to value-added 
services such as eTransact, which offers bank and government 
transfers, mobile banking, and enhanced commodities tracking, 
Rawlings said. 
MCCONNELL