Mobile Phone and Telecenter: A comparative case study of Bangladesh and Uganda

By Rubayat Ahsan
March, 2008


A range of information and communication technology based development projects have been undertaken over the past several decades. However, these so-called ict4d projects have had variable success in reaching the extreme poor, the illiterate and the underprivileged. The aim of this paper is to examine the utility of ict4d project efficacy. Particular consideration is given to the village phone program in Bangladesh and the Nakaseke multipurpose community telecenter in Uganda.The findings show that the village phone program, which focuses primarily on the economic empowerment of project beneficiaries, and the Nakaseke Telecenter, which prioritizes expanding service provision, both fail to take into consideration the extreme poor and disadvantaged; a remarkable weakness in conventional ict4d programming. In addition, it indicates that project duty bearers in conventional ict4d projects are not directly accountable and participation is not particularly people centered. Rather, both projects are managed by development agencies for beneficiaries who are not actively involved in project design, a further shortcoming from the standpoint of the rights-based approach (RBA).

Ict4d is for the marginal or for the well off?
In the realm of development programming, information and communication technology is generally perceived to be a useful tool for empowering the marginalized. At the same time, however, projects employing information and communication technology for development (ict4d) purposes have been criticised for failing to reach the truly marginalized.

A common phenomenon in developing countries is the digital divide. It is most pronounced between urban and rural areas. Rural communities are often deprived of the benefits of ICT applications, widening the gap between the privileged and the underprivileged. If rural areas have access to ICTs, local rights may be protected and local capacity may be improved. They may have enormous potential to raise the capacity of people by the usage of ICT appliances and applications. Once they learn to communicate with people, stakeholders, NGOs, agencies and government, it may enable them to know their rights and to improve their quality of life. ICTs have been rapidly changed contemporary society. A majority of the world’s poor live in rural areas and do not have access to ICT. The growing inequality has already divided the world between have and have not. ICT can be a tool to reach and empower rural communities.

Village Phone Program (VPP) in Bangladesh:
Village phone program is increasingly popular among the ict4d projects. Grameen’s VPP project in the least developed country Bangladesh has drawn attention of development practicioners. Grameen has developed VPP as an exemplary model by providing micro finance along with mobile phones. Besides national and international recognition and appreciation, the VPP model has been replicated in other countries. As VPP is apparently a ‘success story’ example of ict4d, therefore, it is used in this research as a case study.

In 1995 Grameen Bank came to know that the lack of information is a constraint for the poor in rural Bangladesh and because of this, the poor are trapped in a vicious cycle of poverty. Grameen Telecom (GTC), a not-for-profit company, was created to develop village phone program. GTC has a 35% share of Grameen Phone Ltd. The objectives of GTC is to provide easy access to telephone services, to initiate new income earning opportunities especially for the GB borrowers, and spread the information revolution to the rural areas. The village phone program was launched in March 1997. GB members are selected on the basis of their good performance with the bank and provided with loans for a mobile phone. Technical installation and support are given by GTC. GB collects monthly installments, VP bills, and other dues from the mobile phone owners. Village phone operators work as community or public phone operators.

Grameen Phone is a join venture among four companies. Norway’s telecommunication company Telenor AS has a 51% share of GP. Professor Yunus was looking for a company that would support providing phone services for the poor in rural areas. Telenor AS showed interest in fulfilling Yunus’s desire to reach rural areas with mobile phone technology. Grameen Telecom holds a 35% share, and was specially created within Grameen family as not for profit organization to run VPP and expand opportunities for poor villages. Marubeni, a Japanese trading company, having investments in many other developing countries, holds 9.5% share. Iqbal Quadir’s[i] New York based Gonophone Development Corporation has 4.5% share.

Nakaseke Community Telecenter in Uganda:
Nakaseke MCT is an internationally recognized ict4d project where multi stakeholders from local, national and international level are involved. This MCT project is well known example of Community telecentres. A range of ICT services are provided from the center. MCT has a different approach for serving community with ICT services than VPP’s aim of economic empowerment.

Nakaseke is the well known MCT in the field of ict4d, which was opened on March
1999 as three years pilot project. It is a join venture between national and international partners[ii]. National Agricultural Research Organization (NARO), Kawanda Agricultural Research Institute, and local NGOs are also part of strategic alliances.
The program is a major component of the U.N. special initiative for Africa, “Harnessing Information Technology for Development” (HITD). Nakaseke is one of the five telecenter projects initiated in Benin, Mali, Mozambique, and Tanzania supported by ITU, IDRC, and UNESCO. The objective of the project is to test and evaluate application of new technology for the development of rural areas, providing information and communication at rural community for catalyzing their development process and finally improvement of quality of life. The MCT is located at rural area Nakaseke under Luweero district located at 50 km north of Kampala in central Uganda. Crop and livestock farming are major economic activities in the smallholdings.

Nakaseke MCT is part of Acacia initiative undertaken by IDRC. The mission of Acacia project is to empower sub-Saharan communities to enable them with ICT. Acacia supports Canada’s contribution to the African Information Society Initiatives (AICS) was endorsed by African governments as an Action to build Africa’s ICT Infrastructure[iii]. Between 1997 and 2000 Acacia Project covers four countries in Sub- Saharan Africa. These countries are Mozambique, Sebegal, South Africa, and Uganda. Few other projects had been implemented in Mali, Benin, and Tanzania. Thus Acacia is engaged with 35 telecenters in seven countries of Sub-Saharan Africa. Among these projects five have been jointly funded by UNESCO and ITU.

Telephones, facsimile machines, computers with Internet access are available at the Nakaseke center. Besides these services there is also a library having digital and print materials. The center has a stock CD ROMS. The center provides ICT training and computer applications. The center conducts out reach programs to reach the people who illiterate, poor and are not accustomed to the usage of MCT. In addition, the center works on compilation of indigenous knowledge recording and dissemination. The center has eight computers, two printers, a scanner, a photocopy machine, VCR, Television, video camera, and projector. Nakaseke MCT basically relies on conventional electricity supplied by Uganda Electricity Board. The center uses deep cycle batteries and inverter as an alternate power supply during power failure.[iv] International donors fund 60% while government provides 40% of the budget. The community contributes fund for the operating cost of the center including accommodation, salaries and allowance of staffs. Community has taken initiative to collect tax which is called “school tax”. Under this school tax scheme every student has to pay US $0.59 per year. ( Mayanja, 2001: 111)

From beneficiaries’ perspective:
From VPP and MCT project analysis, it is found that existing ict4d projects are still discriminatory. These projects are more benefiting to well off classes in the rural community than marginalized group. None of the project has given special attention to vulnerable groups in the community in a significant way. VPP has given special attention to women in rural communities, which is good a initiative but not convincing. VP women are already well off members of the bank. GB has given interest free loan to beggars. GB’s beggar project is a new experiment, which needs further study for evaluation. These projects do not offer “true participation” of their beneficiaries. Beardon et al. (2004) stresses that participation should enable people to identify their information needs and ability to analyze information. Heeks (1999, p.1) says, “Participation is seen to fail in such projects because it ignores context; because it is itself ignored; because it ignores reality; and because it ignores other factors.” The analysis of VPP and MCT project found a lack of conventional practices of ict4d where project beneficiaries are passive receivers rather active designers of their own project. VPP has gone for raising the income level of their beneficiaries; on the other hand MCT project provides ICT services and skills for the community. The empowerment formula of existing ict4d needs further scrutiny from a capability enhancement perspective for claiming rights. In VPP and MCT project the beneficiaries are objects of the project. They do not have much influence over project implementers of the organizations.

From duty bearers or agencies’ perspective:
Ict4d projects needs to change their conventional approach. These are typical ict4d projects that follow conventional development approach, which may not permit a trade-off between development and rights. Practitioners of ict4d need to be educated or aware about human rights for linking “development” with “rights”. Therefore, linkages to rights could result in seeing projects from a rights perspective. Corruption, abuse of power, political unrest, social and life insecurity altogether have created weak governance in Bangladesh and in Uganda, which problematizes development practices. In the perspective of poverty reduction and basic needs VPP aims to lift their beneficiaries above the poverty line. On the other hand, MCT project does not show noteworthy evidence of poverty reduction. However, both ict4d projects lack attention to the extreme poor of the communities.

It is assumed that ICT can empower marginalized. Ict4d projects aim for the development of people. The analysis of the VPP and MCT projects in this thesis has found some areas where the conventional approach of ict4d needs further attention to incorporate them into a RBA. Beardon (2004, p.3) says development means a good quality of life for all people and the goal should be on people’s wellbeing rather economic growth. Beardon says, “I don’t know how to achieve it, but I know that some fundamental changes are necessary.” A “fundamental change” is really necessary to shift the existing practice of ict4d. Incorporation of RBA into ict4d could bring some changes which may benefit the marginalized as shown in this research.

VPP is a good example of ict4d, which has empowered the beneficiaries economically, especially women, and given access to information to community people on a wider scale. Nakaseke MCT is typical of CTCs in that it lacks meaningful participation of the community. Special management positions have to be created on the basis of RBA aspects, for instance non-discrimination, empowerment, good governance, linkages to rights, poverty reduction & basic needs, accountability, and participation. Creating these positions depends on organization’s projects and programs and needs for special focus on any particular or set of aspects.

VPP and CTCs programs have to be redesigned by bringing people back to the center of the project rather than passive receiver of ICT services. CTCs have to make sure that illiterate and poor people in the community have the minimum functionality with computers and internet. Special trainers are needed for this group of people.

Ahsan, R 2006. ‘Incorporation of rights based approach in development programming: an examination of
problems and prospects of ict4d projects’. MA Thesis. Mahidol University.

Mayanja, M 2001, ‘The Nakaseke multipurpose community telecentre in Uganda’, in Telecentres: case studies and key issues, eds C. Latchem & D. Walker, The Commonwealth of Learning.

Beardon, H, Munyampeta, F, Rout, S, & Williams G M, 2004, ICT for development: empowerment or exploitation?, viewed 15 February 2005,

Heeks, R 1999, The Tyranny of Participation in Information Systems: Learning from Development Projects, Institute for Development Policy and Management

Ahsan, MB ed, 1996, Grameen bank and Muhammad Yunus, Mowla Brothers, Dhaka.

Annual Report 2002, Grameen Foundation USA, viewed 30 May 2004,.

Bayes, A 2000, ‘The Phone and the Future: An Evaluation of Village Pay Phones in Bangladesh’, Global Dialogue: The Role of the Village in the 21st Century, Expo 2000 Hannover, Germany.

Bayes, A, Von Braun J, Akhter R1999, Village pay phones and poverty reduction, Program for Research on Poverty Alleviation, Grameen Trust, Dhaka

Bhatnagar, Prof. Subhash, Dewan, A, Torres, MM, Kanungo, P, Grameen Telecom: The village phone program, viewed 30 May 2004,

Campbell, Christopher J 1995, Community Technology Centers: Exploring a Tool for Rural Community Development, The Center for Rural Massachusetts, University of Massachusetts, Amherst

Cohen, Nevin 2001, What Works: Grameen Telecom’s Village Phones, viewed 01 June 2004, .

Dahms, M 1999, Telecentre Evaluation: A Global Perspective, viewed 10 December 2004,

Etta, FE & Parvyn-Wamahiu, S (eds) 2002, The experience with community telecentres, viewed 15 November 2004, .

GrameenPhone Revisited: Investors Reaching Out to the Poor 2004, OECD, viewed 17 February 2005, .

MCT pilot projects 2002, ITU , viewed 24 December 2004, <>

Multipurpose community telecentres (MCTs) in Uganda 2002, ITU, viewed 7 January 2005,

Nassolo, A 2001, Bridging the rural digital divide in Uganda: case study of Nakaseke MCT pilot project, viewed 25 December 2004, .

Report on telecentres in Africa (n.d.), viewed 25 November 2004, .

Rice, MF 2003, ‘Information and Communication Technologies and the Global Digital Divide’, Comparative Technology Transfer and Society, vol. 1, no. 1, pp. 72-88.

UNDP 2004, ICT and Human Development: Towards Building a Composite Index for Asia, ELSEVIER, New Delhi.

End Notes:

[i] In 1994 Iqbal Quadir returned to Bangladesh from USA with the idea to invest in the telecommunication sector.
He had a mindset that ICT could empower people and open up some windows for the prosperity of poor villagers.
He discussed the idea with Professor Yunus. He realized that GB’s institutional capacity can properly
utilize the idea to benefit poor.
[ii] International partners are International Development Research Center’s (IDRC) Acacia initiative,
International Telecommunication Union (ITU), UNESCO, Food and Agricultural Organization (FAO),
and British Council. And national partners are Uganda Telecom Ltd. (UTL), Uganda Public Library
Board, and Uganda National Commission for UNESCO.UNESCO got support from Danish aid agency
[iii] For detail see,, site visited on January 29, 2005
[iv] For detail see Report on Telecentres in Africa,,
site visited on Febrayry 03, 2005.


One thought on “Mobile Phone and Telecenter: A comparative case study of Bangladesh and Uganda

  1. Burning question: Has micro credit done a lot?
    found a good article and book on micro credit and grameen
    Contributors of this book are Doug Henwood, Patrick Bond, Bosse Kramsjo, Badruddin Umar, Susan F. Feiner and Durcilla K. Barker, Farooque Chowdhury, Robert Pollin, Gina Neff , Anu Mohammad, Omar Tareq Chowdhury.

    Here of the excellent article of this book:

    The metamorphosis of micro-credit debtor
    Farooque Chowdhury

    Micro-credit, the well-propagated mantra in the fight against poverty, is now expanding crossing the national boundaries as capital has done for centuries. Countries in the centre and in the periphery in the present world system are near-spellbound by this mantra. The actors include kings, queens, statesmen, bankers, charity foundation initiators, economists, development workers and the poor. Only the last one is at the receiving end.
    The metamorphosis of the micro credit debtor exposes the acts the capital plays in the act of micro credit and makes all its pious pronouncements hollow. The metamorphosis takes not only to the debtor, but also to other members of the debtor-household.
    The debtor of the micro credit turns owner of the tools or raw materials necessary for producing commodity as the debtor returns home from market after purchasing these with the credit money. But with the joy of ownership a poor debtor enjoys through this metamorphosis there comes a new burden, the burden an industrial proletariat does not have to bear: the burden and responsibility of maintaining, repairing and replacing the tools, equipments or parts of these and the costs that accompany it as the debtor is going to produce and going to be a producer of commodities. It is an extra burden. Usually the job is done not only by the debtor, but also by the other members of the debtor—household. That means time, necessary or surplus labour, depending upon a situation. The proud ownership carries another intricate calculation. An industry owner provides premise, shade, light, water, storage facilities, transport, etc. for producing a commodity and before hiring a wage slave the owner has to spend money for these ranging from construction, power and water connections, supervision, etc. which are calculated before the surplus value is appropriated. But in case of the micro credit debtor turned independent owner of tools of production all these burdens fall upon the debtor. It is the responsibility of the debtor turned owner to repair/replace/heal and to spend money for these. That means the debtor has to arrange the constant capital, and sometimes, the variable capital. The creditor does not always provide the money required for these purposes or the debtor has to set aside a portion of the credit money for these purposes. If the debtor sets aside a portion then the person has to extend extra time to the portion of labour that produces surplus. Moreover, the debtor turned owner has to construct/raise a shed for carrying on the production activity and spend money and labour power belonging to the debtor and the debtor’s household. Actually, the debtor, most of the time, uses own premise, rent for which is paid by the owner of the production unit, the debtor. Maintenance and repair is paid by the debtor, now turned into an independent producer. An industrialist has to pay rent for the premise, utilities and other facilities while they are within the premises producing commodity. But in case of the micro-credit all these are the debtor’s responsibility. The metamorphosis of the debtor to owner of tools, etc., to independent producer thus does nothing but increase the surplus labour time and squeeze necessary labour time so that the repayment of the loan can be made as per schedule.
    The debtor turned producer has to plan, search and work out comparative advantage, and procure and transport required raw materials for the commodity to be produced. The debtor, now acting as procurement manager of the household-based production unit, procures and carries or transports the raw materials for the commodity to be produced. Sometimes it is the spouse or sibling who performs the task, unpaid and unaccounted labour power put into the process. Is the equation in favour of the fellow who went to the banker for the poor to realise the fundamental right the banker propagates? Reality is that the shortened necessary labour time and the lengthened surplus labour time, obviously provide the answer. What about the level of appropriation? It is, certainly, not at the level Marx ‘calculated’. It is super-appropriation, never imagined by the mine owners of Rome, the colonial plunderers, the plantation owners, the slave owners in pre-slavery America, the multi-nationals operating in the countries on the periphery, not even the plundering-lumpen capitalists in a number of underdeveloped countries, but only by the multi-national micro credit capital. So, Michael Lipton and John Toye said in ‘Does Aid Work in India?’ : Rates of return on credit projects are particularly high in India; and Joe Remenyi said in ‘Where Credit is Due: Income Generating Programmes for the Poor in Developing Countries’: Credit – based income generating projects may be the most profitable way in which society can invest…Diminishing return has not set in this field…;…banking on and with the poor is a very good thing to do…. The typical successful CIGP …required an investment well below $1,000 per sustained wage – paying position created (one – tenth of the ratio in the formal sector)…[W]hen one is living at the margin of survival earning around $1 a day, an increase in earning capacity of 50 cents a day represents a substantial improvement in cash flow. These statements tell the truth.
    The metamorphosis of the debtor moves further as the fellow turns wage labourer. The micro credit finds a new commodity as, borrowing from Engels, the ‘source of new value,’ source of surplus ‘income’ with which the debtor will repay and ‘this commodity is labour-power’. The labour power is stored up in the bodies of the micro credit debtors and other members of the debtor-household who extend respective labour power to extend the surplus labour time so that the repayment could be made on schedule. As an independent producer the debtor has to fix the pace of production and that determines the debtor turned wage labourer’s pace and length of working hour. Even, the debtor wage labourer has to borrow labour power of others in the household, who are actually paid only by bare subsistence. To make the statement complete it is not the debtor only, but other members in the debt ridden household, along with the debtor, also, turn wage labourer, at least, part time. Does it not appear more intense than the conveyor belt or the Taylor system innovated by the industrialists to increase surplus value? Thus, the entire household turns into a household of wage labourers, full time or part time. Actually, the pace of work is determined by the time schedule of the repayment. Within the scheduled time for repayment the independent producer turned wage labourer, along with the co-workers in the household have to produce and sell that quantity or that number of commodity that can bring in at least the amount of money needed to repay the instalment of the debt. If seasonal variations, changes in market, health problems, other unseen troubles, non-availability of raw materials or transport, in short, major and minor forces, i.e. ‘acts of god and acts of reality’, coordination with the marketing day and the instalment day are taken into account then the pace of production of a debtor turned independent producer turned wage labourer can be imagined. The person has to forget 8-hour working day, rest, amusement and attending to family chores. It is only to produce surplus enough for repayment. Does it sound like the sweating system? Does an industrialist having a supervisor or a foreman appear fool? While an industrialist has to devise a mechanism, a supervisory system and keep a physical appearance in the work place the micro credit capital does not require all these. Its mere regimentation, mere providing credit at the doorsteps of the poor and its higher level of ‘consideration’ or attention regarding collection of part of the credit from the debtor’s home so that the poor fellow does not turn a defaulter that determine the pace of production. This is the condition of the micro credit wage labourer, obviously a bit different from an industrial wage labourer. An industrialist ‘purchases the use of one week’s labour of [a] worker’ if the worker is paid on weekly basis, but the micro creditor purchases the labour of the debtor for an entire year, if, assumed that the loan will be repaid within a year, or for the entire period until the loan is repaid. With the payment for necessary labour time, a specific amount of money paid for subsistence of a worker and members of the worker’s family, an industrialist ‘ensures the continuance of labour-power even after his [the worker’s] death’, but the micro-creditor ensures the simultaneous use of labour – power of the household members of the debtor along with that of the debtor. The labour, through persistent struggles, has won, in relative terms, a number of measures to safeguard own body and soul and the capital has to compromise for its own sake. But the micro credit debtor turned wage worker toils without coverage of any such measure. The micro credit capital that finances micro-production units at household level is smart enough to escape, till today, the struggle of the debtor turned wage worker, by pass all rules, even norms attained so far, and stay safe. There is no working hour; no weekly holiday; no law, rule, regulation governing working time, working condition, safety measures, child labour, female working hour, etc.; no inspectorate looking at the working condition. This makes life miserable for the micro credit debtor turned wage worker and for the members of the household including the minors who help create surplus value without any legal coverage.
    Now, only a few numbers quoted from Microfinance Statistics (vol.17, Dec., 2004), a publication of the Credit and Development Forum. These will help comprehend, at least partially, the width and length of the micro credit net and the surplus value it appropriates in a single country. In Bangladesh, in 2004, the number of active members in the 721 micro financing organisations (MFO), reporting to the CDF, was 16,622,047 and in 2000, it was 11,021,663 in 585 MFOs. In 2004 the number cumulative borrowers from 721 MFOs was 16,244,242 in a country of 140 million. It was 7,409,773 from 585 MFOs in 2000. There are many other MFOs that have not reported to the CDF, many others are operating in different guises and many other programmes and projects operating not as MFOs but carrying on micro credit business. From how many souls do a group of industrialists in a poor country appropriate surplus value? Are those always more than the number just cited? There are answers, obviously, to this question. It is expected that a reader will search the answers.
    The metamorphosis of the micro-credit debtor continues further as the person moves to market with the commodity produced. The debtor then turns to an independent trader competing with peer debtors turned independent traders in the market place and at the same time they together fall prey to the vagaries of market governed by the mighty market forces. While carrying the commodity to the market, sometimes, some other members of the household, shares the load. This labour is unpaid in terms of wage. If counted or paid, the amount comes from the surplus value already generated. If it is unpaid then the amount thus saved stays within the surplus value to be paid to the creditor waiting for the next instalment of repayment. As an independent trader the debtor turned independent producer turned wage worker has to bear all the responsibilities of a trader. But an industrial labourer does not have to take all these responsibilities. The wage slave in a factory just completes respective job and gets compelled to be appropriated of the surplus labour time. Market, supply, demand, transportation of commodity to market, storage, taxes and tolls, speculation, price, etc. are not part of a factory worker’s business. But as an independent trader the micro credit debtor has to bear these extra burdens which are not the creditor’s concern at all. The creditor has tactfully, through the modus operandi, has put it upon the poor debtor’s weak shoulder. There are commodities in the market that are produced in larger, mechanised production units, with higher productivity, which means a cheaper commodity, and, commodities that enjoy facilities created by the WTO. This situation puts the debtor into an unfavourable, uneven playing field, cuts down the debtor’s competitive edge and presses down price of the commodity produced in the household by semi-skilled and unskilled workers and produced with artisan method and tools. There is the packaging, marketing and advertising factor. The person has to reconcile with the situation and that means further tightening of belt. The micro-credit thus pushes the debtor to such a situation with extra burdens while it demands regular repayment of the credit.
    The data on the sectors or sub-sectors that use micro credit in Bangladesh show the sources of surplus value appropriated and who ‘offered’ the surplus labour to generate the surplus value. In 2004, according to the data published in the above mentioned CDF publication, of the 379 MFOs reporting to the CDF, 27.94 percent of cumulative disbursement was in the agricultural sector that included crops, livestock and fisheries sub-sectors while only petty trading sub-sector covered 40.61 percent. The percentage of food processing and cottage industries was 6.28 and of transport it was 2.20. In the years 2003, 2002, 2001 and 2000 the petty trading dominated. From where does trading, whatever its size is, produce the profit? A portion of it is surplus value generated by others in other places. What about the transport, the rickshaw van or the boat, and the cow fattening? The same answer. It is also the surplus value generated by and in different segments of the broader society that is appropriated by micro credit capital that gets in through the debtor’s hand. Other sectors and sub-sectors also provide similar explanation found in political economy. The above mentioned CDF publication provides a few more startling facts: ‘utilisation of loan by sector or sub-sector (as percentage of cumulative disbursement)’ in ‘social sectors’ in 2004 was 1.70 (health:0.44, education: 0.06 and housing:1.20); in 2003 it was 1.58 (0.45 for health, 0.04 for education and 1.09 for housing); in 2002 it was 1.41 (0.39, 0.05 and 0.97); in 2001 it was 1.76 (0.42, 0.11 and 1.23); and in 2000 it was 1.69 (0.37, 0.02 and 1.3). The ‘social sector’ meant by the cited publication was health, education and housing which are actually required for ensuring the debtor’s and the debtor household’s survival, keeping the body and soul of the household based producers or of the trader or of the transport operator together, ensuring that production or trading could be carried on or transport could be operated so that surplus value generation or taking share of surplus value generated by some other is ensured, so that the repayment that includes surplus value is ensured. If a debtor does not have a house or a shed the production unit will be inoperative or will face problems in the production activities; the raw materials, the tools, the fuel, the cow or goat or poultry, the commodity produced could not be stored in; the producer and others in the household joining in the production activities could not survive. So, the housing sub-sector was emphasized most while lending out money in the CDF defined ‘social sectors’. Of course, the façade was benevolence by the micro creditor. Then came health with the same arguments. A judicious choice of the appropriator! Material interest tops the list over human consideration. The extent of concern for health of debtor and debtor household is directly related and tied to the extent of concern of continuation of production, etc. activities. It was followed by education. The level of production and the level of transaction determine the extent of education required and the level of emphasis put into education. None can override this rule. The micro-creditor, also, faithfully follows this one and the life of debtor goes through this metamorphosis.
    Thus, the circuit of metamorphosis of micro-credit debtor moves on and ultimately it completes a full path: a poor, an appropriated person turns debtor, the debtor turns owner of tools of production., the owner turns household based independent producer, the independent producer turns wage worker, the worker turns independent trader, the trader stays entrapped into debt with worsened condition and bigger debt turning one to debt slave. In its circuit the micro credit debtor only produces surplus value or takes a portion of surplus value produced by some other debtor or some other person or persons in the society producing surplus value and transfers a portion of it to micro credit capital. The circuit is both, a closed and an open, signifying the contradiction. The closed circuit keeps the debtor in perpetual and worsening poverty; sometimes, borrowing from the micro-credit literature, graduating a percentage of the borrowers, but pushing down or entrapping others in increased number; and often, throwing back the graduated debtor to the den of poverty again; and in these cases, the mainstream economics finds the rationale in ‘shocks’, ‘setbacks’, etc., natural and social, as their terminology defines. But whatever happens in the lives of a certain percentage of the debtor that does not change the basic structure of the circuit in the broader social matrix, in the process of appropriation of surplus value. Ignoring the macro scenario and putting forth the micro, a few individual cases, putting forth the exceptions instead of the general rule does nothing but vulgarises the arguments itself pushed forward by the mainstream. The open circuit intensifies and accelerates the pauperisation process and thus creating pressure on the system that creates poverty, makes a person poor, and appropriates surplus value. The vulgar economics with ‘hollow eye and wrinkled brow’ (Shakespeare, Merchant of Venice) extending support to micro credit capital may construct a façade by resorting, again, to vulgar arguments. It may argue that a certain percent of micro credit debtors have improved their living condition with the aid of the panacea as a few days ago they used to mean the micro credit. But this does not nullify the fact of appropriation of surplus value from others in the broader society. Rather, it puts the evidence that surplus value has been appropriated from some other persons. There are many economists in the bandwagon of micro credit who cite cases of increased consumption by the micro credit debtors. But it should not be missed that consumptions are of two types: productive and individual; while the first one is to create products the other is turned into means of subsistence. So, data of debtors’ increased consumption, claims regularly made by the mainstream economics, carry no meaning other than better and ensured supply of surplus labour power which is expropriated. The fact should not be missed that the entire system rests on the appropriation of surplus value and micro credit is a part and, now is an institution of the system. It is sustained by the system and it helps sustain the system.
    The socialisation of micro-credit, with its profit profile, allures other capitals in banks and financing companies to join in. The capital engaged in micro-credit ties, quoting from Shakespeare, the ‘poor man’s cottages [to] princes palaces,’ organises and regulates debtors including members of the debtor-households, keeps them entrapped in the micro credit web, appropriates surplus labour power of them and others in the broader society. Moreover, it now regulates, based on its global power, the analytical process of a section of economists who overlook the process of appropriation of surplus value upon which the micro credit thrives, and try to ignore definitions of political economy and propagate vulgar ideas.

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