Posts Tagged ‘Grameen Bank’

Statement of Prof. Yunus Regarding His Removal from Grameen Bank

May 7, 2011

Statement of Nobel Laureate Professor Muhammad Yunus on the Occasion of Supreme Court Verdict on May 5, 2011 Regarding His Removal from Grameen Bank.  Professor Yunus voiced his concern after revelations surfaced surrounding violence against employee leaders of the Bank.  Those interested may also want to read in the Bank’s point-by-point refutation of the allegations brought up in the government’s Review Committee report, as well as by the nation’s government-aligned media.

You have already heard the verdict from the Supreme Court.

Why did I appear before the Court? Why did I want to contest the order of Bangladesh Bank? Why there is so much concern about this issue at home and abroad? There may be some confusion regarding these questions. Please allow me to share my feelings with you to remove this confusion. I went to the Court for a specific reason. Bangladesh Bank sent a letter to Grameen Bank, removing me from my post as Managing Director of Grameen Bank. The letter also mentioned that I held this position for the last eleven years illegally. Bangladesh Bank did this without giving me a chance to explain my position. I felt that this letter was not legally correct, and through this letter, not only was I been wronged, but so was Grameen Bank. Nine elected members of the Board of Directors of Grameen Bank felt the same way. That is why the nine members of the Board and I filed separate writs in the High Court. We wanted these wrongs to be corrected. Therefore, we had to seek justice through all avenues offered in the Bangladeshi judicial system. This is what we have done.

The fate of 40 million poor people connected to this
In the event that the Honorable Court stated in their final decision that the letter from Bangladesh Bank was issued without lawful authority, I could continue my work with Grameen Bank and make the transition to a capable management as smoothly as possible. But, if the Court verdict went against us, the Board may be forced to take steps to implement the content of the Bangladesh Bank letter. This was the only reason for me to take this matter to the Court. I had no option but to seek justice in this matter.

It is indeed a much wider and much more significant issue to save the future of Grameen Bank and also to protect the hopes and dreams of the over 8 million borrowers. These borrowers are also the owners of 96.5% of the Bank’s shares. The Bank is connected with 40 million microcredit borrowers in Bangladesh, and its impact on all these people cannot be neglected. What happens to Grameen Bank influences the future of the millions of Bangladeshis who benefit from microcredit activities, as well as the future of the institution of microcredit itself. It is actually a great concern for me, and many others, that I properly fulfill my responsibility to safeguard their future before and after leaving the post of Managing Director of Grameen Bank.

Some have said that, instead of going to the court, it would have been more honorable for me to resign from my position as suggested by the Finance Minister. I do not think so. In that case, the end result would have been the same, so far as my exit is concerned. But I would have suffered from carrying the guilt of knowingly accepting an unexpected proposal and putting the borrowers and their families’ futures at risk. I could not do that.

Millions of borrowers like the ones seen meeting above could be adversely affected by a government takeover of Grameen Bank.

Millions of borrowers like the ones seen meeting above could be adversely affected by a government takeover of Grameen Bank.

Some people felt that I intend to cling to the position of Managing Director of Grameen Bank. But, the nation knows that this position is not my life’s goal. I was, and am, conscious of the fact that my future work will not be based on my holding on to this position, but rather, it would be working with the young generation, from other platforms to address the problem of poverty at home and abroad. I want to do that without jeopardizing the interests of Grameen Bank. This is the thought which prompted me to write the letter to the Honorable Finance Minister one year ago. I suggested two options to him for a transition that could take place without creating any waves within the Bank.  I did not get any response to these proposals.  I was, instead, told to quit. It is, therefore, unfair to me to suggest that I am holding on to the of position of managing director unjustly or to allege  that I am not co-operating in the process of transition.

For the last few months, a section of the media devoted itself fiercely to campaign against me, Grameen Bank, and the concept of microcredit. Everyone has his own explanation why this is happening.

An unfriendly atmosphere is not helpful for a smooth change of leadership
The cause of my concerns, as well as those of the nation and the world, lies here. These concerns are more for Grameen Bank and the future of its millions of borrowers, than for me. For this reason, I have been reminding you repeatedly that undertaking the transition process of Grameen Bank’s management in an unfriendly environment will only cause harm to the future of the Bank. I have always wanted to make sure that the transition takes place in a friendly, mutually supportive environment, so that the achievements of Grameen Bank may continue without interruption. There are many issues related to this. The big questions are: whether Grameen Bank can maintain its independent existence, and whether it can be successful in keeping itself away from political influences. What actually happens to financial institutions in our country if political influences start playing a role in these institutions is common knowledge. This experience will not inspire trust in the borrowers.  We all know how important the role of trust is in the operation of Grameen Bank.


Two Steps Backward for Innovation to End Poverty

May 5, 2011

A guest post from Sam Daley-Harris, Founder of the Microcredit Summit Campaign, which seeks to reach 175 million poorest families with micro-loans, and of RESULTS, which seeks to create the political will to end poverty.

The deed is done.  On May 5th, the appellate division of the Bangladesh Supreme Court agreed that the Bangladesh Bank, the nation’s central bank, was justified in firing Nobel Peace Prize Laureate Muhammad Yunus from his post as Managing Director of Grameen Bank, the institution he founded more than three decades ago.  Prof. Yunus’s lead lawyer, Dr. Kamal Hossain, one of Bangladesh’s most distinguished attorneys and a drafter of the nation’s constitution, was scarcely able to hide his disgust at the Appellate Division order, when he said, “I [apparently] have to take admission to university again to newly learn the constitutional laws of the 21st century.”

The dismissal is not the lone action of one government institution, but is part of a premeditated campaign that starts at the highest level, with Prime Minister Sheikh Hasina.  Their reason for sacking Prof. Yunus?  He’s “too old.”  Never mind that the 70-year-old Yunus maintains a rigorous schedule or that the Finance Minister, another key player in the sacking, is at 77 somehow not “too old” for that post.

The dismissal of Prof. Yunus from his post as Managing Director of Grameen Bank could portend ominous changes by the Bangladesh government.

The dismissal of Prof. Yunus from his post as Managing Director of Grameen Bank could portend ominous changes by the Bangladesh government.

Their excuse would be laughable if it were not for the calamitous impact it portends.  What makes the decision to remove Prof. Yunus so disgraceful is not that he would be out of a job – any university in the world would welcome him with open arms as a visiting professor.  No, the atrocity here is the fact that the independence and integrity of one of the world’s premier poverty-fighting institutions is now at grave risk.  Grameen Bank, an extraordinary institution with more than 8 million microcredit borrowers that took 35 years to build, could be destroyed in a matter of months by incompetent government action.

The government’s action cannot honestly be in response to accusations by a Danish documentary maker about an improper transfer of Norwegian aid funds more than a dozen years ago, because both the Norwegian government and Bangladesh’s own review committee have found that Grameen Bank did nothing wrong.  It cannot be due to the documentary maker’s charge of excessive interest rates, because Microfinance Transparency and the government’s own review committee found that Grameen Bank has the lowest interest rates in the country.  Instead, most observers see this as an inexcusable political vendetta by the Prime Minister against Prof. Yunus, stemming from his short-lived attempt to start a political party in 2007.

Consider these groundbreaking innovations that Prof. Yunus’ poverty-fighting laboratory has brought to the world, and what could be lost in the future from his unwarranted ouster:

  • In 1976 he made loans of less than US$1 each to 42 desperately poor Bangladeshis to start or build tiny businesses – and the microcredit revolution was born.  It has made its way all around the world.  While others have seen microfinance as a way to make big money for investors, Prof. Yunus has never once diverted from his original intent to empower the poor.
  • In 1997 Grameen Phone Ladies started bringing cell phone technology to remote villagers throughout Bangladesh – providing the dual benefit of creating jobs and increasing communications, which enhanced others’ work.
  • Grameen Shakti, an energy firm, has installed more than a half-million solar home systems and sold more than a quarter-million improved cooking stoves.
  • In a joint venture with Danone, the yogurt maker headquartered in France, Grameen Danone is bringing low-cost fortified yogurt to malnourished children throughout the country – and creating a business opportunity for the poor women who sell it.
  • College scholarships and loans have gone to 180,000 students. Most remarkably, in almost all of the cases, these are the children of illiterate parents who have had the help of Grameen Bank in breaking the bonds of inter-generational illiteracy.

A government that so rashly and ruthlessly ousts this innovative and transformational leader cannot likely be trusted to continue his revolutionary work.

But the deed is done.  Here is a sample of the visionary voice that Bangladesh has likely lost in this despicable government act.  Reflecting on the 1997 Microcredit Summit, Prof. Yunus wrote: “In teaching economics I learned about money, and now as head of a bank I lend money.  The success of our venture lies in how many crumpled bank bills our once starving members now have in their hands. But the microcredit movement, which is built around, and for, and with money, ironically, is at its heart, at its deepest root not about money at all.  It is about helping each person to achieve his or her fullest potential.  It is not about cash capital, it is about human capital.  Money is merely a tool that unlocks human dreams and helps even the poorest and most unfortunate people on this planet achieve dignity, respect, and meaning in their lives.”

An Update on Grameen Bank

April 29, 2011

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.

The ongoing saga of the confrontation between the Bangladesh government and its allies in the local media on the one hand, and Professor Yunus, the Grameen Bank and its 8.3 million borrower-owners on the other, has taken some surprising turns in the last 10 days.  On April 20, representatives of Grameen Bank’s employee association held a well-attended press conference, covered by The Daily Star and other print and electronic media, where they presented the signatures of 20,103 colleagues who urged the government to either allow Prof. Yunus to remain as Managing Director or, failing that, to appoint him as Chairman of the Bank’s Board of Directors.  This follows a similar effort by the borrower-owners of Grameen Bank, 3.7 million of whom signed hastily circulated petitions several weeks ago demanding that Prof. Yunus be allowed to remain as the bank’s chief executive.

Professor Muhammad Yunus listens to some of Grameen Bank's borrower-owners at a local Center meeting.

Professor Muhammad Yunus listens to some of Grameen Bank's borrower-owners at a local Center meeting.

More recently, the so-called “Review Committee” appointed by the government to probe into the affairs of Grameen Bank and its sister organizations submitted its report – spanning more than 100 pages, according to some sources – to the Minister of Finance.  While the report has not been officially released, portions of it have been leaked to government-aligned media outlets.

Soon after receiving the report, the Finance Minister commented on it to the press.  His two principal messages, as covered by the AFP wire service, were that there was no improper diversion of Norwegian aid funds in the 1990s, as had been reported in the media, and that Grameen not only did not charge “excessive” interest rates, but that it in fact charges the lowest rate of interest among microfinance organizations in the country.

Neither of these “findings” were surprising to anyone who has been following this story closely and without bias, but it was noteworthy nonetheless that a government-sponsored commission publicly affirmed these facts.  However, this did not stop hostile elements in the Bangladeshi media from seizing on the submission of the report to make new unfounded allegations against Professor Yunus. This has prompted Grameen Bank to issue a detailed “Response to the Various Issues Raised in the Review Committee Report as Reported in the Press“.

With the government-appointed committee finding that two often-repeated criticisms of Grameen Bank had no merit, hopes are rising that around the time of an upcoming Supreme Court ruling (expected May 5), Bangladesh’s judiciary or perhaps the leadership of the ruling party will put forward some kind of plan that will respond to the desires of Grameen Bank’s employees, clients and nine elected Board members to ensure the continued involvement of Prof. Yunus.  That would be welcome news and enable everyone to briefly celebrate and then get back to the work at hand – reducing the grinding poverty that remains the daily reality for millions of families in Bangladesh and around the world.

Those interested in this issue might also want to listen to a special donor update that Alex conducted by conference call on March 23, 2011. In it, you’ll hear a brief summary by Alex of the situation, as well as an enlightening question-and-answer session where Alex gives his views on the causes of the government’s actions, possible scenarios going forward, what this means for the microfinance sector as a whole, and how changes at Grameen Bank could affect Grameen Foundation.

Will the Government of Bangladesh Ruin Grameen Bank?

April 20, 2011

Barbara Weber, who worked at Grameen Foundation from 2002 to 2006, was a Rotary International Ambassadorial Scholar in Bangladesh and is now working on her Ph.D. in depth psychology.

Bangladesh went from being dubbed the world’s basket case in 1973 by former U.S. Secretary of State Henry Kissinger to becoming a beacon of development innovation that the rest of the world has since sought to emulate, thanks in large measure to its pioneering in microfinance. This renown is fast turning to infamy, however, as political vendetta cannibalizes the very source of the nation’s well-deserved pride.

The country’s acclaim reached a crescendo in 2006, when the Nobel Peace Prize was awarded to Grameen Bank and its founder, Professor Muhammad Yunus, for creating a system that has enabled the poor to pull themselves up by their boot straps. It has done this so effectively that its microfinance model has been studied exhaustively and replicated around the world.

What ensued next seems to have won Yunus the ire of the current prime minister, Sheikh Hasina. In 2007, the newly ordained Nobel laureate made a fleeting and ill-fated foray into politics in a vacuum that was created when a military-backed interim government began jailing operatives of the country’s top political parties. Sheikh Hasina herself was temporarily in exile and charged with masterminding crime.

Prof. Yunus and most of the Board directors who represent the borrower-owners of Grameen Bank tour the streets of Oslo the day before receiving the Nobel Peace Prize in 2006.

Prof. Yunus and most of the Board directors who represent the borrower-owners of Grameen Bank tour the streets of Oslo the day before receiving the Nobel Peace Prize in 2006.

Some saw this as a potential turning point for a country that had topped Transparency International’s list of the most corrupt governments in the world. Bangladesh was number-one on that list for five consecutive years. But when national elections were held in 2008, Sheikh Hasina – who had held the post of prime minister from 1996 to 2001 – again took office. Now, she and her party in power seem intent on systematically dismantling Grameen Bank.

In apparent collusion with the current government, the country’s highest court recently upheld the ouster of Grameen Bank’s founder as managing director. The Supreme Court will have one more opportunity to review the case in a ruling that is due on May 2. In the meantime, Prof. Yunus remains managing director of the Bank while the world watches attentively and awaits Bangladesh’s next move.


Day Six: Old Friends and Off to the Airport

December 21, 2009

My last day in the country was the beginning of the Bangladeshi weekend – Friday.  That meant somewhat less traffic, a blessing to be sure.  I spent three hours, starting at 10am, with my former research assistant, Abdul Mannan Talukdar.  He is the first Area Manager in the history of Grameen who started as a loan officer (a position now called “center manager”).  He is immensely proud of that, as he should be.  An area manager oversees 8-10 branches, each of which are staffed by about seven staff (almost always including a university-educated branch manager) and serves several thousand clients.  He told me about his journey, culminating in that historic promotion, dating from when I last saw him, in 2006.


Day Five: Back in the Grameen Headquarters

December 21, 2009

I arrived at the Grameen Complex at 10:30am on Thursday, after having visited my old dentist (who does quality work for a fraction of the price charged back home).  Before I began my first meeting, I noticed the almost frenetic activity around me in each office I entered.  My good friend Mir Akhtar Hossain, who heads Dr. Yunus’ person staff, was so busy he could barely catch up with me – much less indulge in our traditional lunch of chicken biryani down the road in Mirpur One.  Even after thirty-three years in existence, complacency has hardly taken root in the Grameen family of companies.


Day Four: Transit Back to Dhaka, and a Reunion

December 21, 2009

I awoke on Wednesday in what we in the U.S. would consider a large tin shed.  As the manager had warned, mice had run amok in the rafters at times during the night.  Fortunately, I was able to tune it out after a while.  Soon I was off to the Zianpur bazaar to say my goodbyes to the local Grameen staff, the teachers at the high school whom I had always been close to, and others in the community.  I felt quite emotional by the time I jumped on the back of a motorcycle and headed to Aricha, where I would get a public bus to Dhaka.


Day Three: Grameen Villages – Back to Kholshi via Narandia

December 17, 2009
Shaheeda Begum

Microfinance Client Shaheeda Begum

After a delicious Bengali breakfast of vegetables and paratha, I began a field trip that would ultimately bring me to Kholshi, where I did most of the research for my book Small Loans, Big Dreams.  But first I asked to see a Grameen Bank center meeting, to see how the process has evolved.  Abdul Malek, the manager, took me to Narandia, a village where there was a borrower meeting that day – this is where loan payments are made, new loans vetted, and other business conducted on a weekly basis.

Malek is still fairly new to this branch, and to driving a motorbike, so our trip through rice fields and the occasional dirt road was a bit of an adventure.  I had visited Narandia a couple of times in the 1990s.  Then as now the dominant force in this center – a federation of ten groups composed of fifty women clients – was Shaheeda Begum.  She was making payments on her two current loans that totaled about $1,000.  Only two other women in the center were able to borrow and invest amounts that large.   To a much greater extent than was true a decade ago, loans are made on the basis of investment capability, and can vary a lot from client to client.  Shaheeda was one of the most savvy businesswomen in the village.  But as she would explain to me over the course of an hour, when she began borrowing from Grameen in 1987 her conditions were much humbler than today.


Day Two: Grameen Power and Moving to the Field

December 16, 2009
Muhammad Yunus and Royston Braganza

Muhammad Yunus and Royston Braganza

Royston and I spent the first few hours on Monday back in the Grameen Complex in Dhaka.  The most exciting meeting was with two retired Grameen Bank officials — Fazley Rabbi and, briefly, Abser Kamal – both of whom now work with Grameen Shakti (Energy).  Shakti, a sister company of Grameen Bank set up by Dr. Yunus in the early 1990s and that had been led until recently by Dipal Barua, has become a world leader in bringing renewable energy to rural households.  We heard how they had passed 300,000 solar home systems installed, and how they do it profitably and at a rate of 13,000 per month at present.  (The second most successful program of this kind has reached just over 100,000 installations.)


Back in Bangladesh

December 14, 2009

Alex Counts is President and CEO of Grameen Foundation, and the author of “Small Loans, Big Dreams: How Nobel Prize Winner Muhammad Yunus and Microfinance are Changing the World” (John Wiley & Sons, 2008). Below is Part Two of this journey to assess the state of microfinance with Grameen Foundation partners worldwide.

Muhammad Yunus and Alex Counts

Muhammad Yunus and Alex Counts

After a gap of about two years, on December 13, 2009 I returned to Bangladesh – the birthplace of the modern microfinance movement and the country where I spent six of the first nine years after I graduated college.  I came here initially driven by naïve idealism – that someone (especially at my tender age!) could catalyze the spread Grameen Bank’s approach beyond the borders of Bangladesh, so it could to become a global (rather than simply national) anti-poverty strategy.  As I was to learn, even by the time I arrived in December 1988, that process was under way – a process that was much more complex than I had imagined, and one that has been the focus of Grameen Foundation since it was established in 1997.



Get every new post delivered to your Inbox.

Join 296 other followers