Grameen Bank Fights for Founder

March 7, 2011

The Bangladeshi government wants Grameen Bank to fire its founder Professor Muhammad Yunus, who, as a microfinance pioneer and Nobel laureate is probably the most renowned Bangladeshi in the world. The government's public position is that Yunus, who is 70 years old, continues to work at Grameen in violation of Bangladeshi law, which sets the national retirement age at 60.

It's a difficult position to defend, however, since the Prime Minister and most of her ministers are over 60, and the President (a largely ceremonial position) is 81 years old.

The demand for Yunus' ouster was presented to the board last week by the government-appointed chairman of Grameen Bank, Abul Maal Abdul Mihith, a vocal opponent of Professor Yunus. (The government holds a 25% stake in the bank by statute; the remaining 75% is shared by an estimated 8 million Grameen borrowers and depositors, mostly women.)

Prof. Yunus, with the backing of a majority of the board, has refused to step down, and is challenging his ouster in court.

Yunus, considered by many to be the father of microfinance, has been been at odds with the political leadership of Bangladesh since 2007, but the situation seemed to worsen in December when a documentary airing on Norwegian television alleged improper transfers of funds between Grameen Bank and one of its not-for-profit affiliates. Although Grameen and Prof. Yunus were cleared of any wrongdoing, the Prime Minister, Sheikh Hasina Wajed, a one-time champion of microfinance, appears to have used the incident to push for the ouster of Yunus (who observers explain, she considers a political rival) and to condemn microfinance generally.

Move Prompts International Scorn

The Grameen Foundation is bringing a crowd to Washington today to rally front of the White House in support of Prof. Yunus, beginning at 11:30 am. Yunus is also slated to speak at the National Press Club, in Washington today. And in an obvious show of support, the U.S. Secretary of State, Hillary Rodham Clinton, is scheduled to meet tomorrow with Prof. Yunus, who is also a recipient of the U.S. Medal of Freedom.

As the Bangladeshi government persists in attempting to oust Prof. Yunus from the institution he founded, it has found itself on the receiving end of international scorn.

"This is the latest move in a campaign to persecute Prof. Yunus and undermine the independence of Grameen Bank," the Microcredit Summit Campaign complained in an email to supporters. "This is a scandalous way to treat a visionary who is the world's greatest innovator in the field of poverty eradication."

New York Times columnist Nicholas Kristof posted this comment to Twitter on March 2: "I've seen lots of dumb, self-absorbed politicians. But rarely has one as venal as Bangladesh PM Hasina as she persecutes Yunus."

"The current situattion is damaging not just to Grameen Bank and poor clients in Bangladesh, but also to the wider microfinance industry," CGAP (the Consultative Group to Assist the Poor) said in a statement.

There's even a new international initiative - Friends of Grameen - advocating on behalf of the bank and its founder. Mary Robinson, formerly prime minister of Ireland and a former U.N. High Commissioner for Human Rights, has been named honorary chair of the Friends of Grameen.

Worldwide, 3.5 billion people lack access to financial services. By 2012, 1.7 billion of these unbanked individuals are expected to have access to mobile phones.

_{- CGAP}