Academic journal article The Journal of Developing Areas

Financial Sustainability of Union Digital Center in Bangladesh

Academic journal article The Journal of Developing Areas

Financial Sustainability of Union Digital Center in Bangladesh

Article excerpt


This paper examines the financial sustainability of the Union Digital Centers (UDC) in Bangladesh in terms of entrepreneur's monthly income. In order to mobilise additional resources and harness efficiency gains for providing rural people with digital information and services and generating entrepreneurship the government have engaged home grown youths under public-private partnership (PPP) in the project. Contrary to the expectation, many entrepreneurs earn vary minimum and are forced to depart the venture leaving behind the promise of the telecenter disrupted. In the context of precipitating dropouts from limited income understanding and predicting a sustained level of income attain significance. This study aims to identify factors that have influence on the variability of entrepreneur's income. For collecting data from involved partners it surveyed 538 entrepreneurs online and interviewed other management stakeholders. Since all entrepreneurs could not be reached through the internet 19 of them are interviewed in-depth along with relevant management officials and local representative of the UP from 16 UDCs of 4 districts. It defines the sustained income as 5001 (USD 65) and above Bangladeshi Taka per month and predicted it using the binary logistic regression. It ascertains the major enablers of sustained income and the interrelationship among them that evolve from the interplay of partners. The study finds that most UDCs are somewhat reasonably supported with the basic ICT equipment, while others are adorned with advanced equipment, to provide a range of services including certificates, e-government and commercial type . However, the level of equipment and services across centers varies depending on the extent of assistance from the government, the UP and the entrepreneurship of the private partner. The scale of inputs from public partners and the entrepreneur's investment have been found to be associated with the number of people including disadvantaged visiting these centers for services. All these variables are associated with the income of the entrepreneur with different magnitudes. The hypothesis that partnership components such as infrastructure and service inputs, entrepreneurial capacity along with people's participation all have a significant part in explaining the monthly sustained income is tested using the binary model and found to be partially supported. The author argues that some of the inputs still could not make any significant contribution due to the lack of effective involvement of relevant partners. But to ensure financial sustainability of all UDCs and to prevent the dropouts of entrepreneur's the increase in units of these factors can play a significant role.

JEL Classification: 000811

Keywords: Financial sustainability, telecenter, entrepreneur, e-government, public-private partnership


The telecenter movement is increasingly attaining popularity in developing countries for its missions of digital inclusions, e-service promotion and e-literacy spread in the context of technological, financial and human resource constraints for establishing widespread connectivity (Bhatnagar, 2009; Hanna 2010). Often, for cheaper and convenient capacities this innovation is adopted by many governments as the leapfrogging strategy to bypass massive infrastructural and management cost burdens for development of full scale e-government. Being a window of e- delivery point it enables the government to reach those who are otherwise unreachable with the promised benefits of e-government. Since the aim is to curtail cost and reach out with greater efficiency many telecenters are founded on Public Private Partnership (PPP) approach. It is understood that though the government take the initial responsibility to build them they would ultimately be owned and operated by the private sector with the financial viability attained. But to date the achievement is half-way between success and failure (Naik, 2011; Jensen, 2007). …

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