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Opinion: Bangladesh Supreme Court decision damages microcredit success of Grameen Bank

Published on June 3, 2011

Microfinance Transparency ( and the government’s own review committee found Grameen has the lowest interest rates in the country.

Click here to read the Times of Trenton article


Opinion: Bangladesh Supreme Court decision damages microcredit success of Grameen Bank

On May 5, 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. Professor Yunus’ lead lawyer, 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’s 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 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, at 77, is somehow not “too old” for his post. Their excuse would be laughable if it were not for the calamitous impact it portends. What makes the decision to remove 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 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 that took 35 years to build, and that has more than 8 million microcredit borrowers, 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 did nothing wrong.

It cannot be due to the documentary maker’s charge of excessive interest rates, because the organization Microfinance Transparency ( and the government’s own review committee found Grameen has the lowest interest rates in the country. Instead, most observers see this turn of events as an inexcusable political vendetta by the prime minister against Yunus, stemming from the latter’s short-lived attempt to start a political party in 2007. Consider the ground-breaking innovations that 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 $1 each to 42 desperately poor Bangladeshis to start or build tiny businesses — and the microcredit revolution was born. Since then, it has made its way all around the world.

While others have seen microfinance as a way to make big money for investors, Yunus has never once diverted from his original intent to empower the poor. • In 1997, Grameen Phone ladies, who have a business selling phone time to their neighbors, 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 started by Yunus, 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 provided through Grameen Kalyan have gone to 180,000 students, most remarkably, in almost all of the cases, to children of illiterate parents who have had the help of Grameen Bank in breaking the bonds of intergenerational 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, 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.” Sam Daley-Harris is founder of the Microcredit Summit Campaign (, which seeks to reach 175 million poorest families with microloans, and of RESULTS (, which seeks to create the political will to end poverty.

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