Bottom Line: The Grameen Bank, one of the landmark institutions for assisting the poor of Bangladesh, and receiving a Nobel for its role in establishing microcredit, has become a political football. The Bangladeshi government is making moves to oust its current leadership and install government-controlled leaders. At the very least, this is intended to cause a black eye for Grameen founder Dr. Muhammad Yunus. But I fear the damage to the women who are the current owners and borrowers of the bank will be far worse. International pressure may cause the Bangladeshi government to back off, so please consider adding your name to a petition to protect the bank.
For those of you who weren’t followers of my old blog (from the Reuters Digital Vision Fellowship), the Grameen organization with its flagship Grameen Bank, isn’t just the Nobel-winning creator of the microfinance movement. It’s also a group of people that I admire, some of whom I got to know personally and collaborate with on the Mifos Project. That includes a couple of meetings with Grameen Bank creator and Nobel Prize winner Muhammad Yunus.
The Grameen Story
As an economics professor making a visit to a village in his homeland of Bangladesh in 1974, Dr. Yunus saw villagers suffering from obscenely high interest rates for loans for their necessary raw materials. By making a “micro-loan” (a number of loans totaling $27), he was able to start them on a path to creating a livelihood that provided better food, housing, health, and education for their children. In 1983, the Grameen Bank was founded to provide microloans to more people. Repayment rates were very high (97%+) aided by the fact that loans were extended to groups of 5 women who were effectively co-signing for each other’s loans. The effectiveness of microcredit was widely praised and duplicated, and today the Grameen Bank has nearly 9 million members (97% women), 20,000 staff members, and a weekly turn-over of $1.5M. A host of other businesses were started under the Grameen umbrella, and Alex Counts, who, as a Fullbright Scholar, was a protege of Yunus, started the Grameen Foundation USA. In 2006, Yunus and the Grameen Bank shared the Nobel Peace Prize for the impact of microcredit in alleviating poverty. The Grameen Bank is structured as a cooperative, with the borrowers being the shareholders, owning 97% of the bank, and the government owning the remaining 3%. The shareholders elect the directors, and for many years, Dr. Yunus served as the Managing Director of the bank.
In early 2007, Yunus briefly entered the political fray in Bangladesh, creating a political party that he shut down a few months later. Still, that was enough to rattle political opponents, and he was the target of a slander suit, a smear campaign based upon a discredited story of misuse of Norwegian aid funds, and finally a retraction of the exemption that he had been granted of the retirement age of 60. (Dr. Yunus is now 72.) Although he has tried to make plans for an orderly succession, the government is making a power grab and wants to appoint its own people to run the bank. Jealousy over Yunus’ Nobel has been cited as another contributing factor.
All 17 women Senators of the US Senate signed a letter requesting that the other directors of the bank board be permitted to choose the next Managing Director.
A YouTube video features some borrowers telling their stories, followed by the directors make the case themselves. (The subtitles don’t translate the amounts. 85,000 taka is about $1,000 and 1.5 million taka is about $18,000. The amount that the women couldn’t borrow was 2,000 taka = $25.) The video was eye-opening for me in another way. I saw the title “Voices of the Grameen Bank Board Members” and I realized at the end of the video I was confused…. Where were the men in suits? Yep, I was done in by my US prejudices. The women in saris *are* the directors. (See the full board listed on their site.)
How you can help
Consider signing the two petitions at: