The Time to Defend Grameen Bank is Now

Todd Bernhardt is Director of Marketing and Communications at Grameen Foundation.

As you might have read in the news this week, the Bangladeshi government seems to be moving into the end game in its longtime effort to take over Grameen Bank, a move that has been widely criticized within Bangladesh and around the world.  To briefly summarize, the cabinet – presided over by Prime Minister Sheik Hasina – voted on Thursday to amend the Grameen Bank Ordinance of 1983, effectively removing the Board of Directors’ right to choose the Bank’s Managing Director, and vesting that power instead in the Board’s government-appointed (and aligned) chairman.

As troubling as that disenfranchisement of the Bank’s 8.3 million borrower-owners is (more than 8 million of these owners are poor women), equally troubling is a directive from the cabinet to the Finance Ministry to examine and report on the salaries and benefits that Grameen Bank founder Professor Muhammad Yunus received after he turned 60, which is the official age of retirement from the Bank. It also asked the Ministry to examine whether he earned foreign currency that was tax-exempt during his time as Managing Director.

(Prof. Yunus, who is 72 and going stronger than ever, was exempted from the retirement age by the Grameen Bank Board, whose decision was reviewed and accepted by the government for more than a decade before it suddenly decided that he was too old for the job; the post of Deputy Managing Director was also exempted. For more information on the government’s 21-month campaign against Prof. Yunus and the Bank, see this Fact Sheet developed by the Friends of Grameen organization. Grameen Foundation President and CEO Alex Counts also recently blogged about this issue.)

The women on Grameen Bank’s Board of Directors, who represent the Bank’s 8.3 million borrower-owners and are shown here with Prof. Yunus at the Nobel Peace Prize ceremony, are in danger of losing their ability to choose the Bank’s Managing Director.

Let’s look at the second part of the cabinet’s actions first.  The idea that Prof. Yunus would benefit financially from any of his activities advocating for the poor is patently absurd.  Throughout his career, he has had multiple opportunities to join corporate boards as a paid advisor or even to lead for-profit organizations, for great personal gain – yet he has declined.  He has consistently donated whatever money he has earned as a public speaker to social businesses dedicated to serving the poor or to other charitable causes – including Grameen Foundation, which began with $6,000 that he earned from one such speaking engagement.  He lives in a small apartment on the Grameen Bank campus.  All of his activities – either as leader of Grameen Bank or as leader of the Yunus Centre, which focuses on fostering social businesses – have been other-focused, rather than focused on personal gain.

As for the government’s moves to give the Bank’s chairman almost unlimited power to choose a new Managing Director and to sideline the poor women who own this successful, innovative, Nobel Prize-winning microfinance institution – well, to many, it smacks of pure desperation, and an attempt to shift public attention away from a number of public policy failures.  The government of Sheikh Hasina is facing a host of challenges and embarrassments at home, including the recent cancellation by the World Bank of a loan to fund the $1.2 billion Padma Bridge project – a huge infrastructure initiative that was going to be a hallmark of her administration – because of corruption within the government and contractors involved.  She herself has become more autocratic and combative, as noted by The Economist in several articles, and as demonstrated by a recent appearance on the BBC’s “Hard Talk” interview show, where – among other things – she argued with the presenter about accusing Prof. Yunus of “sucking blood from the poor in the name of poverty alleviation” (a well-documented quote from her referring to him) and misrepresented Grameen Bank’s interest rates, saying that it charges between 30 and 45%, when her own administration has confirmed studies showing that the Bank’s highest charge is roughly 20%, seven points below the maximum rate set by the government.

Professor Yunus, who was a surprised and disappointed as the rest of us by the cabinet decisions and directives, released the following statement on Friday:

I was very apprehensive about it for some time. Now my fear is becoming a reality. I am disappointed that we were not successful in stopping this process. It  makes me immensely sad to see the poor women being deprived of their rightful ownership and their rights as owners to exercise their power over the bank. I am so shocked by the turn of events that I am left without words. I request my fellow citizens who are as shocked as I am, to try to  persuade our government to realise that this is a very wrong step they are taking; they should refrain from proceeding with this. The decision of the government would destroy this well known bank for the poor, the bank that has made the country proud.  I urge our fellow countrymen to come forward and save this successful national enterprise owned by the poor women. I am also urging the poor owners of Grameen Bank to appeal to the government and the citizens  to come forward to help them safeguard  their rightful ownership of the Bank.

What can non-Bangladeshis do about these injustices?  You can take action by speaking up – Grameen Foundation has a petition that we plan to give soon to U.S. Secretary of State Hillary Clinton, asking her to reiterate the U.S. government’s strong support for the continued independence of Grameen Bank and the rights of the poor women who own it.  Microcredit Summit has its own petition on Change.org, also in support of the continued independence of the Bank, that it plans to give to Sheikh Hasina.  Please sign both petitions, and urge your friends, family and those on your social networks to do the same.

We would also ask that you contact your legislative representatives, and the media, no matter where you live, and let them know how important it is to you that the world’s flagship microfinance institution remain independent and able to continue its effective, innovative role in the ongoing battle against poverty. Time is short. The Bangladeshi government’s commission reviewing the Bank and the other Grameen social businesses is moving ahead quickly, and new actions against the Bank may be announced soon, so it’s essential that you act now to defend the rights of – and opportunities for – the world’s poorest.

In the meantime, we will keep you informed about developments as they occur.  Of course, with your support, we will continue our work around the world to provide the poor with access to appropriate financial services like microsavings and loans, as well as access to life-changing, real-time information about their health, crops, animals and finances. Working together, in the spirit of innovators like Grameen Bank, we can begin to realize Prof. Yunus’s vision of putting poverty where it belongs – in a museum.

Tipping: A Viral Infection We Want to Catch

Alex Counts is president, CEO and founder of Grameen Foundation, and author of several books, including Small Loans, Big Dreams: How Nobel Prize Winner Muhammad Yunus and Microfinance are Changing the World.

At Grameen Foundation, we often talk of the concept of “tipping,” which was popularized by the book The Tipping Point by Malcolm Gladwell.  I define the concept as taking something, such as an idea or a product, to the point where it starts to spread virally, exponentially and without much additional effort.  For an organization like Grameen Foundation that works with limited resources to make significant impact on a global problem such as poverty, it is a very important concept.  Through tipping, our early seeding and nurturing of innovations can lead to their widespread adoption by poor people, the organizations that serve them, and even by businesses and governments.

One example is our Growth Guarantees program, which pioneered loan guarantees to forge mutually beneficial business relationships between local commercial banks and microfinance institutions (MFIs) working to alleviate poverty.  In the program, we not only directly consummated transactions (bringing nearly $200 million to MFIs, who were then able to help more than 1 million new poor borrowers), but more importantly, proved the concept and prompted many other banks to follow suit (even without guarantees from Grameen Foundation).  Likewise, our efforts to replicate the highly successful village phone program of Grameen Telecom, initially in Uganda, set in motion dozens of “village phone” initiatives, most of which we had no direct role in starting or managing.

The PPI is a simple, short, country-specific survey that poverty-focused organizations can use to better understand the people they’re trying to help, as well as the effectiveness of their work. This is a screenshot of the PPI for the Philippines.

I thought a lot about Grameen Foundation’s role in “tipping” last week when I flew to Jordan to attend the annual meeting of the Social Performance Task Force (SPTF), a group in which Grameen Foundation has been deeply involved for years.  More than 300 people attended.  The SPTF sets standards and shares best practices for those practicing ethical, poverty-fighting microfinance.  Partly as an acknowledgment of Grameen Foundation’s central role in the task force, I was asked to give the closing remarks at a historic “CEO Roundtable” where the heads of leading MFIs came together to discuss implementation of the just-completed “universal standards for social performance management.”  The standards have the potential to reshape how MFIs around the world work in fighting poverty, mainly by comprehensively adopting what have emerged as effective practices through the task force’s dialogue and research over many years.

Reporting from Hong Kong

Shannon Maynard is Director of Bankers without Borders^®, Grameen Foundation’s skilled-volunteer initiative. Maynard has more than 15 years of experience in nonprofit management and volunteer mobilization. Before joining Grameen Foundation, she served as Executive Director of the President’s Council on Service and Civic Participation, and managed strategic initiatives for the Corporation for National and Community Service, a federal agency. This post is the first in a four-part series.

The summer after I joined Grameen Foundation to run Bankers without Borders (BwB), I had the pleasure to travel to Shanghai, China, where we had amassed a significant pool of advocates for our work – the “Shanghai Volunteers.” I met with these inaugural members of our BwB community (organized by uber-volunteer Susan Place Everhart) and joined Jennifer Meehan, our Regional CEO for Asia, in meetings with potential corporate partners for Grameen Foundation’s work in the region.  After spending time in Shanghai, I then traveled to Bangalore, India, where BwB was undertaking one of its first corporate collaborations and field-based projects in Asia, with Grameen Koota and a team of volunteers from Accenture, Dow Chemical and Citi.

It’s now three years later, and I am headed to Hong Kong – Grameen Foundation’s regional headquarters for Asia – to spend time with Sharada Ramanathan, the extraordinary woman behind BwB’s presence today in Asia. Working with Grameen Foundation’s regional staff, we’ll brainstorm how to continue to deeply integrate volunteers into the way Grameen Foundation does business – from helping us fundraise and addressing our own capacity gaps, to creating standard roles for volunteers in delivering our programs and services in Asia. We’ll also look at how we continue to share the skills and expertise of volunteers in our database – more than 20% of whom are based in Asia – with other social enterprises that have a market-based approach to improving the lives of the poor.

BwB Regional Program Officer for Asia, Sharada Ramanathan (left), and Director Shannon Maynard are spending a week meeting with volunteers and supporters in Hong Kong.

As I prepare for this trip, I think it’s worth reflecting on some of BwB’s successes, failures and insights from our three-year history in Asia.

Making Progress Through Savings

Kimberly Davies is a program officer on Grameen Foundation’s Financial Services team.

Traveling to the field and talking with clients is the favorite part of my job.  I’ve worked in microfinance for five years and think daily about the poor women and families whom we support. Working with partner organizations and meeting clients face-to-face not only reminds me of why I’m in this field – it also helps me better understand the poor’s demand for financial services and the many challenges involved in providing those services.

It has been really exciting to see the progress of our microsavings project in India.  The first time I visited our partner organization Cashpor Micro Credit – a poverty-focused microfinance institution (MFI) in Varanasi, India – it was not yet offering savings products to its clients. This was partly due to complex Indian regulations requiring MFIs to work with banks to provide savings. Since then, Cashpor partnered with ICICI Bank and Eko Technologies (a tech provider that enables savings via the mobile phone) to launch a new savings product in the summer of 2011.

Microsavings accounts provide poor parents with a safe place to save for their children’s future.

Since the launch, Cashpor has added about 250 new savers every day, and currently has more than 60,000 savings accounts. Cashpor’s clients have spoken loud and clear about their desire to save. Clients told us during my last visit that they wanted their own safe savings accounts, but I wasn’t sure what the real demand truly was. It’s also challenging to offer convenient services to clients, because some do not have cell phones, most can’t read and many are even numerically illiterate. These challenges, on top of others, were things that I knew would take time to navigate.

However, the huge demand does make sense. A safe place to save is critical for families, because it helps them smooth consumption during times of sporadic income, or prepare for an emergency or a planned lifetime event. Of course, people want convenient tools to help them better manage their lives. In the United States, we have access to so many financial tools in our everyday life – various savings accounts we can access at any time, insurance, loans, locked CDs that yield a safe and consistent interest rate, etc. You name it, we have it. The poor want these same tools.

Truly moving out of poverty is a huge task. Though tools like the Progress Out of Poverty Index^® can measure the likelihood that an MFI’s client base is poor and track its movement out of poverty over time, this is a complex thing to measure, because forces such as natural disasters and family illnesses can prevent people from moving out of poverty or cause them to slip back into poverty. These uncontrollable forces make the use of easily accessible and affordable financial tools – such as savings accounts – all the more important to the poor.

Again and again, I’ve seen with my own eyes and heard with my own ears how access to financial services has improved the lives of poor people and their families. I look forward to seeing Cashpor’s savings program grow even more over the next year, as they help more women and families in need.

Growth for All: Including the Poor in Strategies for Economic Growth

Michael Castellano is a graduate student at The George Washington University, studying International Affairs and Development. He interned with Bankers without Borders^® at Grameen Foundation during the spring of 2012.

In the years following the global financial crisis, politicians and policymakers across the globe have harped on one cardinal goal: economic growth. Without a doubt, plans for growing the economy will dominate discussions in the upcoming U.S. presidential election. It seems as though we as a society have collectively determined that if only the economy would turn around, conditions would certainly improve across the board. If only we could enact legislation to spur economic growth, inevitably we would all be better off.

Fortunately, statistics show that the United States has seen steadily climbing annual growth rates since the nadir of the “Great Recession.” Developing countries and emerging economies have, on the whole, experienced average growth rates of more than 5 percent thus far in 2012 and will continue to propel the world’s progress, according to financial forecasts. So – this is good news for everyone, right?

Not necessarily.

Although a country’s national economy may grow, the poorest of the poor often remain completely disconnected from the financial, political and social systems in place. Without active bank accounts, the poor cannot easily save or access other financial services. In rural villages, people may not have easy access to healthcare and can quickly fall victim to external shocks such as disease or natural disaster. Without these services, poor people around the world cannot reap the benefits of overall economic growth.

During my time at Grameen Foundation and through my studies in International Development during this past year, one fundamental lesson has stood out: Though economic growth is certainly important, growth does little to reduce poverty if the poor lack access to essential services. This illustrates a key principle that development practitioners dub “pro-poor growth.”

Michael Castellano, shown here during a trip to Australia, served as an intern at Grameen Foundation this spring.

Pro-poor growth involves forming development policies and strategies that target the poorest of the poor and offer new ways of connecting them to financial markets. Professor Muhammad Yunus, Nobel Prize laureate and founder of Grameen Bank, stated, “The direct elimination of poverty should be the objective of all development aid. Development should be viewed as a human rights issue, not as a question of simply increasing the gross national product.”

Panel Explores the Power of the Mobile Phone in Fighting Poverty

Alex Counts is president, CEO and founder of Grameen Foundation, and author of several books, including Small Loans, Big Dreams: How Nobel Prize Winner Muhammad Yunus and Microfinance are Changing the World.

I first met Isobel Coleman, Senior Fellow for U.S. Foreign Policy and Director of the Civil Society, Markets and Democracy Initiative at the Council on Foreign Relations, through one of our greatest Grameen Foundation Board members, Lucy Billingsley.  When Isobel and I were introduced to each other, she was running a small program at the Council focused on women’s issues.  She has since grown it into a flagship initiative of this prestigious institution, and her reputation as a researcher and thought-leader has naturally grown along the way.

I was therefore very pleased when she invited me to speak as part of her Women and Technology series last week, alongside Ann Mei Chang, senior adviser for women and technology, Office of Global Women’s Issues at the U.S. Department of State (and formerly with Google), and Scott Ratzen, Vice President for Global Health at Johnson & Johnson.  The title of the session was “mDevelopment: Harnessing Mobile Technology for Global Economic Growth.”  We had a planning call with Isobel, Scott and Ann Mei the week before and I realized I was joining some extremely knowledgeable and articulate people.  To prepare, I read up on all of Grameen Foundation’s many programs that work to alleviate poverty by leveraging the mobile phone revolution, as well as some related research on inclusive business models.

Alex Counts makes a point while (from left) Isobel Coleman of the Council for Foreign Relations, Ann Mei Chang of the U.S. State Department and Scott Ratzan of Johnson & Johnson listen.

The event was kicked off with remarks by Suzanne McCarren of ExxonMobil, which sponsors this speaker series.  Suzanne, whom I sat next to during lunch, explained why women’s economic development is a high priority for their company’s foundation, which has made more than $50 million in grants so far, according to my notes.  Then Cherie Blair, the former first lady of the United Kingdom and the founder of a foundation that bears her name, spoke.  She announced the release of an important new report titled, “Mobile Value-Added Services: A Business Opportunity for Women Entrepreneurs.”  I had met Cherie several times through Meera Gandhi, whose book Giving Back features the Cherie Blair Foundation for Women, as well as Grameen Foundation.

Delivering New Services for the Poor

The Mobile World Congress has ended, but the excitement generated by discussions of helping the poor through mobile phones remains high. For those of us working in international development, it was heartening to see this issue no longer relegated to “corner discussions” or side conversations in the hallways between sessions. As noted by Heather Thorne, Grameen Foundation’s Vice President for Information Solutions, this time the valuable role of mobile phones in global development was front and center. Telecom operators and others are now seeing the opportunities for developing products and services for the poor.

One highlight for Grameen Foundation was the announcement of our collaboration with MTN Uganda and CGAP to research and develop mobile financial products for the poor. The need is clear: 2.7 billion people – most of whom live in developing countries – still do not have a bank account. This is largely because many low-income communities are underserved by financial institutions, which typically offer products that are more suitable for higher-income clientele.

Though the growing number of mobile money services is helping to address the access issue, we still need products that are appropriate for low-income consumers. Our goal with this new initiative is to drive innovation that can yield a full array of services that are affordable and accessible for poor clients, while being commercially viable for the financial service providers involved.

Ensuring that Healthcare for the Poor Is Just a Call Away

The annual Mobile World Congress is the place to see the latest mobile phones and applications before they hit the market. But that’s not why Tim Wood is there. As director of Grameen Foundation’s Mobile Health initiative, he’s more interested in how the mobile industry can help improve health outcomes for people who can barely afford a $20 phone.

Tim was part of a panel discussion on mobile health for development – the first of its kind to be held at a Mobile World Congress. He hopes this will galvanize even greater awareness of, and support for, the life-changing opportunities that a simple phone can provide to poor people around the world.

Grameen Foundation’s Mobile Health solutions focus on improving patient care for the poor by helping healthcare providers become more efficient, and by making modern medical information easily accessible and relevant to the poor themselves. In Ghana, we have been working through our MOTECH initiative with the Ghana Health Service on a “Mobile Midwife” service that sends weekly messages to pregnant women and new mothers reminding them of appointments and providing health tips that reinforce advice from their local nurses. In addition, nurses can update their clients’ data on their mobile phones and access their records as needed. Since 2010, we have registered more than 11,000 pregnant women and families in the country’s remote Upper East Region.

Be sure to follow our coverage of the Mobile World Congress 2012 to learn more about how we can deliver products and services to poor, rural communities through the 4 billion phones that are already in developing countries and emerging markets.

Dialing up new businesses for the poor

This week, mobile phone makers, operators and developers are converging at the annual Mobile World Congress in Barcelona, Spain. Hosted by the GSM Association (GSMA), it is the largest gathering of its kind.

Mobile phones play an integral role in the way Grameen Foundation helps poor people get access to the financial services, business opportunities and vital information they need to improve their lives. We’re at the conference to help build even greater awareness of, and support for, the life-changing opportunities that a simple phone can provide to poor people around the world.

Over the next few days, our team will share insights from the conference. Today’s highlight comes from Sean DeWitt, Director of our AppLab Indonesia initiative, which is helping to create new technology-based businesses for poor people in Indonesia, in collaboration with Qualcomm’s Wireless Reach initiative™ and Ruma, a local social enterprise.

Through this initiative, the “microfranchisee,” typically a woman, sells mobile airtime minutes to local customers. The microfranchisee can also use the phones to provide customers with additional services, such as access to job listings. Since 2010, we have created a network of more than 10,000 microfranchisees (85 percent of whom are women) serving more than 1 million customers. On average, they earn $1.10 per day – a significant sum in a country where 75 percent live on less than $2.50 per day.

Today, there are more than 5 billion mobile phones around with the world, with 4 billion of them in developing countries and emerging markets, where they are often shared by several people. Be sure to follow our coverage of the Mobile World Congress to learn more about how these phones are being used to deliver products and services to poor, rural communities.

Social entrepreneurship by another name – “Contribution”

By Jon Gillespie-Brown, Author “So you want to be an entrepreneur?”

—

In my opinion Social entrepreneurship is in fact a subset of a much more powerful global phenomenon called “Contribution”.

An example of this working in the real world is my book “So you want to be an entrepreneur?” – All the profits from the book go to the Grameen Foundation!

So why would I work for years on a book and then give all the profits away?

Contribution is why…

OK, so what does Contribution mean?…well my definition is: “Giving with no expectation of anything in return”.

So how can “contribution” lead to success and how can you join in – even if you aren’t yet an entrepreneur?

I know this seems like a long shot or a disconnect, surely success is all about being smart and hard working? Well that depends on what you believe, you still need to do those things but if you think about it whenever you were really helpful and thoughtful about others and helped or gave without looking for a reward – what were the results?