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

INTRODUCTION

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). On a parallel trajectory Bangladesh has also followed a similar solution to connect its citizenry, vast majority of who live in rural and distant communities, to digital information and services (A2I, 2011). The government's technical and advisory unit in charge of e-services, the Access to Information (A2I) under the Prime Minister's Office, has adopted a quick-win strategy by introducing shared access points in all Union Parishads (UP), the lowest tier of local government existent all across the country (4547). In operation since 2010 these access points are known as the Union Digital Centers (UDC) that aims to work as the focal point of service delivery by bringing various government, private and local government services to the doorsteps of people and to foster local entrepreneurship. Operated by two private entrepreneurs (Uddakta), one male and a female, under the public-private partnership model, the UDC is an ICT enabled one-stop center supported by the government and the UP. It charges prescribed fees for delivery of services to meet the day to day operation costs and income for entrepreneurs. While the government has assisted in the initial set up of UDCs it expects that entrepreneurs would eventually take the responsibility of sustaining the business in the long run (A2I, 2015)

However, the initial observation and conversation with relevant stakeholders suggest that this project suffers from a very high rate of drop-outs of entrepreneurs from a variety of reasons, predominantly from low levels of income. The lack of adequate income serves as a major disincentive for e0ntrepreneurs, especially women entrepreneurs, who leave the UDC premise trailing behind the promise of the center interrupted with financial and opportunity costs as well as a dent in the entrepreneurship development (A2I 2015; Siddiquee and Faroqi 2013). No study has so far covered as what factors are responsible for the insufficiency in income. Hence, understanding the financial sustainability in terms of operator's income attains significance in for its implications for entrepreneurship and sustainability of the model.

RELATED WORKS

In the context of externally supported telecenter project financial sustainability attains utmost importance in the discourse of sustainability since donor subsidies cannot be taken for granted for ever (Harris, 2007). The term refers to the capacity for earning adequate income for covering costs for operation and initial set up (Shadrach and Sharma 2013). However, as the revenue sufficiency does not preclude receivables from the outside, for government owned projects the financial sustainability may not always refer to attain the 'break-even' point by charging users because many other government services are not burdened with such a responsibility (Hudson, 2001; Harris, 2007). …

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