Mohammad Yunus ousted of head of Grameen: full story,
19 May 2011Muhammad Yunus, founder of the Grameen Bank and a pioneer of modern microfinance, has been ousted from his position of Managing Director of the bank he founded. Yunus has been at loggerheads with the Bangladeshi Government, and with Sheikh Hasina Wajed, the Prime Minister, in particular. Yunus’ problems began in early 2006 when he considered making a move into politics. He penned an open letter to the Bangladeshi Daily Star, in which he asked members of the public to give him ideas about how he could set up and run a new party that was anti-corruption and designed to establish good governance, public trust and committed leadership. The new party was to be called Citizen Power.In early 2007 he announced that he was abandoning his plans, but his grassroots popularity and potentially vast political support apparaently unsettled the Bangladesh political elite. In November 2010 a documentary called ‘Caught in Micro Debt’, made by a Danish filmmaker and which aired on Norwegian TV, accused Yunus and Grameen on three counts. Of diverting about $100,000,000 from the Norwegian Agency for Development Cooperation (NORAD) to another organisation called Grameen Kalyan in 1996. This allegation quickly spread through the Bangladeshi media despite almost immediately being denied by NORAD. In fact, they undertook a comprehensive case review in 1996 which cleared Grameen.Of charging borrowers interest rates of 30-200%. Again, this was disproved by MicroFinance Transparency who employed an independent expert to investigate: they found that Grameen had the most (i.e. 100%) transparent interest rates of any MFI globally and that the highest rate they ever charged was 22.84%. Again, however, this rumour circulated furiously in the Bangladeshi press. Of making empty promises to its borrowers and putting them in jeopardy with bad debt-recovery practices.
Again, this was proven to be either a misrepresentation or falsification. Despite the shaky validity of these allegations, the media –and subsequently the Government- seized on the accusations and began to use them to attack Yunus and Grameen. All of this was happening at a time when the whole microfinance sector was under attack following the spate of borrower suicides in Andhra Pradesh. The Government launched an official investigation into the matters.
The Government’s investigation led to increased calls for Yunus to step down, and earlier this year the Government finally got their way. The government appointed chairman of the bank Muzammel Huq used the Bangladeshi law that states that all heads of banks must retire at 60. This decision was then supported bythe Treasury Minister….aged 77. He appealed the decision and then took it to the High Court and lost on both occasions. For a country that always appears in the world’s to ten most corrupt -according to Transparency International’s Perceptions of Corruption Index- this is hardly surprising.
There have been some very unsavoury reports emerging from Bangladesh about the Government’s behaviour that includes intimidating supporters and, in some cases, assaulting supporters of Grameen. Given the levels of corruption the Government is accused of and for and its historic failures with running the stock exchange and other banks, calls are growing for a robust international response. We await to see the outcome of this upheaval.