Iqbal Quadir was awaiting Internet connection repair in his New York City private equity office in 1993, wondering why the World Bank's attempts at development in his native Bangladesh had so consistently failed, despite making perfect economic sense.
The 1987 Wharton alumnus realized that failure had resulted from the practice of simply throwing money at the problem instead of giving Bangladeshis the tools to generate their own income. He began to understand that the 100 million Bangladeshi citizens living in poverty are not simply mouths to feed, but brains to be activated.
"Whereas the wealthy have the luxury of not having to learn and see change as pointless, the poor are eager to learn just to get by," he said.
This was the beginning of Gonofone, which has transformed into today's GrameenPhone Ltd. It is currently Bangladesh's largest telephone company, with revenues of $150 million in 2002.
The process begins with loans from Grameen Bank that are given to rural citizens, who then use the money to buy mobile phones from GrameenPhone. Before Quadir's program began, phones in rural Bangladesh were nearly nonexistent.
The borrowers -- 94 percent of whom are women, because the company believes they are more economically responsible -- then allow other village members to use their phones for a price, slightly above the price charged by Quadir's company.
These women have in essence started their own small businesses, making on average twice the income of other women in Bangladesh.
"These impoverished women have the resource of time and are better learners than the wealthy I have come by in Bangladesh." Quadir said.
He added that GrameenPhone has led to new business opportunities nationally and on a local level and safer standards of living. Rural farmers can now quickly learn prices nationally and worldwide, creating a more competitive and efficient marketplace.
The next set of investments will likely be used for energy production in the 70 percent of villages that lack it in order to push further mobile-phone sales.
The Bangladeshi government is following suit with its own mobile service.
"They have inefficiently offered fixed line services for years -- let them try again." Quadir said with a smile.
