Grameen

Aug 3, 2012 at 03:28 o\clock

GB ordinance endorsed

by: bangladesh   Keywords: Grameen, Ordinance, Yunus

Chancellor Yunus DHAKA: Nobel Laureate Dr Muhammad Yunus expressed his deep concern as the government had endorsed the draft Grameen Bank Ordinance-2012 (Amendment) with the provision of giving more authority to chairman in appointing managing director (MD).

The founder the Grameen Bank (GB) made the reaction in a written statement hours after the cabinet meeting held at the Secretariat with Prime Minister Sheikh Hasina in the chair on Thursday.

In the statement, he said, “I have earlier expressed this apprehension what has come true now. I am very sorry that we could not be successful in stopping the process.”

“I have become very worried to see process of depriving the poor from their ownership in the bank. I am very worried that I am unable to express my emotions,” he further said in the statement.

The eminent economist of the country also urged the people, who feel same, to make the government understand that they are doing mistake. “So, they should restrain from the initiative,” he said.

Dr Yunus claimed that the decision of the government would destroy the bank of the poor. “I request the people of the country to come forward to protect the property of the poor and the country,” he said.

He also called upon the poor owners of the bank so that they urge the government and countrymen not to deprive them from applying their rights.

Earlier in the day, the government has approved the draft Grameen Bank Ordinance-2012 (Amendment) with the provision of giving more authority to chairman in appointing managing director (MD).

The approval came from a cabinet meeting held at the Secretariat with Prime Minister Sheikh Hasina in the chair on Thursday.

Under the draft ordinance, the authority of the chairman has been increased and he will appoint managing director after consultation with selection board.

Aug 1, 2012 at 03:10 o\clock

Chairman empowered to pick MD - GB Ordinance-2012 endorsed

by: bangladesh   Keywords: Hasina, Cabinet

Chancellor Yunus DHAKA: The government has approved the draft Grameen Bank Ordinance-2012 (Amendment) with the provision of giving more authority to chairman in appointing managing director (MD).

The approval came from a cabinet meeting held at the Secretariat with Prime Minister Sheikh Hasina in the chair on Thursday.

Under the draft ordinance, the authority of the chairman has been increased and he will appoint managing director after consultation with selection board.

Prior to the approval, the Grameen Bank selection board has authority to choose the managing director.

Besides, the cabinet also questioned about the validity of holding MD post by Dr Muhammad Yunus after expiring job age 60 which fixed by the Supreme Court.

Apart from this, it queried about amount of money that Dr Yunus took from the bank as per his salary and allowance during his job period and its’ validity.

Department of Bank and Financial Institutions were asked to inform the cabinet regarding the matter.

The cabinet also questioned that how much money brought by Dr Yunus from abroad under Wage Earner during he was MD of the bank.

Whether the money bringing would be considered as illegal, its amount, whether any age earner tax facility took in bringing the money and how much it.

Internal Resources Department has been asked to look into the matter.

Jul 1, 2012 at 18:07 o\clock

Nobel Laureate appointed Chancellor of Glasgow Caledonian University

by: bangladesh   Keywords: Chancellor, Glasgow

Chancellor Yunus The world thought leader in social business and international anti-poverty campaigner, Professor Muhammad Yunus, is to be the new Chancellor of Glasgow Caledonian University. The Nobel Peace Prize winner succeeds Lord Macdonald of Tradeston, who has completed a distinguished five-year term of office.

Professor Yunus is the founder of the Grameen Bank, a global movement dedicated to alleviating poverty through micro-lending to those with the very least in society. His work has inspired young people around the world to devote themselves to social causes.

University Principal and Vice-Chancellor, Professor Pamela Gillies said: “The University is truly honoured and delighted that Professor Muhammad Yunus has accepted our invitation to become Chancellor.  

“Professor Yunus and the University have a shared commitment to promoting educational opportunities for talented young people from the most difficult of circumstances. He has pledged his inspirational leadership in support of the University’s undertaking to harness our intellectual, social and emotional capital and collaborate with others to find solutions to some of society’s most pressing challenges.  The whole University community warmly welcomes our new Chancellor, one of the world’s outstanding thought leaders.” 

In accepting the invitation to take on the role of Chancellor, Professor Yunus said: “I would like to thank Glasgow Caledonian University for inviting me to accept this prestigious position.  I look forward to building on the fruitful relationship that has already been established and has produced benefits which are helping to improve the quality of life for people in both our countries.”

Chair of Court, Tony Brian, said: “This is a wonderful appointment and testimony to the strength of our working relationship with Professor Yunus. He will be an excellent successor to Lord Macdonald of Tradeston who has held the office with such distinction.”

Professor Yunus already has a well-established working partnership with Glasgow Caledonian University. In March he announced at the University details of a new charity, the Grameen Scotland Foundation.  The Foundation, supported by the Scottish Government, is the cornerstone of a microfinance bank branch in Glasgow designed to alleviate the economic, health and social inequalities in some of Scotland’s poorest communities. It will be precisely modelled on the Grameen Bank, which was founded in 1976 by Professor Yunus in Bangladesh and now operates in 100 countries, including the USA.

The announcement of the Foundation is the latest collaboration between GCU and Professor Yunus.  In 2010, GCU opened the Grameen Caledonian College of Nursing in Bangladesh to help bring nurse and midwifery training to an international standard in a country which is desperately short of nurses. GCU set up the Yunus Centre for Social Business and Health the same year, which researches the impact of microcredit on the health and wellbeing of communities in Scotland and overseas. 

Professor Yunus, who was awarded an Honorary Doctorate of Letters of the University in 2008, delivered the inaugural Magnusson Fellowship Lecture, an annual event which was established in memory of GCU’s late Chancellor Magnus Magnusson, who was succeeded by Lord Macdonald in 2007.

Offering his best wishes to Professor Yunus, outgoing Chancellor Lord Macdonald said:  “May his tenure be as enjoyable as mine.”  
On Thursday Lord Macdonald presided over his final GCU graduation ceremony at the Royal Concert Hall in Glasgow. The eminent journalist, broadcaster and politician said it had been a “great privilege to be Chancellor of such a flourishing University”.

Lord Macdonald enjoyed an award-winning career in television and newspapers before being elevated to the House of Lords in 1998. He served for five years as a government minister and now sits on the Prime Minister’s Advisory Committee on Business Appointments.
Reflecting on his term of office, Lord Macdonald hailed as the highlights of his tenure the launch of GCU London, GCU’s international achievements, and the work of the award-winning Caledonian Club to raise aspirations and support ambition in disadvantaged communities.

He said: “It has been a great privilege to be Chancellor of such a dynamic university.  Presiding over graduation ceremonies was always a particular pleasure – welcoming thousands of happy students and proud families from all over the world to Glasgow.  GCU is the only Scottish university which also has a campus in England, and I was delighted last week to take part in the graduation ceremony in London.

“Impressive international initiatives include a partnership campus in Oman, activity in China and a new nursing college in Bangladesh.  The creation of the Yunus Centre for Social Business and Health also furthers GCU’s mission to combat poverty and offer opportunities to those most in need.

“Another highlight is the success of our award-winning Caledonian Club which encourages schoolchildren and their families to become part of our GCU community from an early age, building confidence and encouraging their ambition.

“With my background in media, I am delighted that GCU has pioneered a Masters degree in Television Fiction Writing.  My former colleagues at STV, Eileen Gallagher and Ann McManus of Shed Warner Productions, have ensured widespread support for this ground breaking initiative across the TV industry.

“The last five years have been challenging for the higher education sector, but GCU has flourished under the dynamic leadership of Principal and Vice-Chancellor Professor Pamela Gillies and her executive team.  I shall greatly miss the vitality of our students, the talent of our academic staff and the friendliness of all those whose efforts have made the University such a welcoming place to work.”

Jul 1, 2012 at 15:02 o\clock

Universities must have social goals

by: bangladesh   Keywords: social, business

Nobel Laureate Prof Muhammad Yunus yesterday urged universities to write new textbooks to open up the minds of students to new ideas and systems of doing businesses as the existing economic model was not working, as seen in the developed world.

He said profit maximisation could not be the only goal of a business. They must have “social good” also as a goal. “We are teaching students to be good and skilful professionals. But we do not teach them how to choose the main goal of life.”

"Everything is job oriented. Can it be the meaning of education, only to find a job? It teaches that the more money you can earn the more successful you are."

Definition of “success” should include service to society, to have empathy for the poor, he added.

Prof Yunus called on the universities to become true “knowledge hubs” and spread the knowledge out of the campus so that people benefit.

The microcredit pioneer was speaking at the opening ceremony of "Social Business Forum 2012" at the North South University in Dhaka.

The founder of Grameen Bank said the current economic system was not appropriate to solve all the problems faced by the people, as it emphasised the making of money.

He said conventional business was designed in such a way that profit maximisation becomes an obsession. "In the process, we have created many problems. As a result, the world has become a mess."

Prof Yunus said due to rising problems, people had become confused and did not know what to do.

"This makes social business so very relevant as it is dedicated to solving problems," he said.

He said money-making could be a means, but cannot be an end, and should not be the purpose of life. "Money-making could be a means, but using this money for solving social goals should be the end."

Commerce Minister GM Quader said social business originated from Bangladesh. "We are proud of it. It is our product."

He said businesses were very essential for a society and they would also make profit to be sustainable. But they should not be profiteering.

"Bangladesh needs businesses such as social business."

He said the younger generation could move forward with this idea.

NSU Vice-Chancellor Prof Hafiz GA Siddiqi said Prof Yunus had long been known for his microcredit concept, which had been copied in most countries throughout the world.

"Now he has presented the world another idea--social business."

NSU Board of Trustees Chairman MA Hashem said the society and the nation would benefit from such a novel idea. "It will help us build a peaceful world. It will add a new dimension to business."

Prof Abdul Hannan Chowdhury, dean of School of Business at NSU, said social business was all about doing good for humanity, rather than making personal profits, a major goal for conventional businesses.

He said the new business model could transform the economic and moral history of the world forever. "And how fortunate we are that none other than our own Prof Muhammad Yunus has offered the world that possibility--not just a theoretical framework, but in practice."

Prof Abdul Hannan said the world was gradually moving towards new paradigms in business and entrepreneurship. "Let us be a part of that great movement."

Foreign diplomats, economists, civil society members, politicians, and academia and university students attended the event.

Later at a panel discussion on "Social Business: A New Path for Corporate Leaders", the Nobel peace prize winner said social business was not an isolated issue. One would not have to distance him or herself or give up everything to set up a social business, Prof Yunus said.

"Social business can run parallel to traditional business. Every business can do social business alongside their conventional business. Any big business can do it to solve a social problem."

Prof Yunus said social business should not be seen as an opponent to the charities.

"I am not against charity, but charity has some limitations."

He said in most cases of charities, the donors write cheques and give away the money and forget about what has had happened to the recipient.

In the case of charity, it would not be asked whether the purpose for which the fund was spent had been achieved, he said.

"The companies are not involved with it any longer. But in case of social business the owners employ creative power and set up the business out of personal pleasure and to solve a social goal. It is not giving up ownership."

He said universities could set up social business fund and could be a matchmaker between the funds and the students with good ideas.

Prof Yunus also said the difference between corporate social responsibility and social business was that the former was not a business, while the latter was a business.

The commerce minister said social business was an interesting concept. "I think it is the integration of businesses and social work."

He said it was acceptable and ethical that businesses would make profit. Businesses have to make profit to be sustainable but making too much was not acceptable, which amounts to profiteering.

"Social business is a service to the society," said the minister.

He also said the government could play an important role in promoting ideas like social business.

Munawar Misbah Moin, a group director of Rahimafrooz, narrated how his company successfully replicated the model of Grameen Shkakti, a social enterprise set up by Prof Yunus, and built a successful business selling solar energy solutions.

Mahfuz Anam, editor and publisher of The Daily Star, moderated the discussion. He said questions have to be asked whether the world would last with the way "we are running our society and businesses".

He said Bangladesh had a long tradition of philanthropy through which schools, colleges and hospitals were set up with charitable funds. "But charity is a one time spending for social good, and therefore unsustainable."

"But through social business the initial fund can be made to produce wealth, which through reinvestment can become sustainable.”

In another panel discussion on "Women Empowerment through Social Businesses" Rokia Afzal Rahman, a former caretaker government adviser, said the youth should be particularly encouraged to set up social businesses as they often come up with innovative ideas.Prof Yunus tells Social Business Forum at NSU

Jun 4, 2012 at 15:37 o\clock

The 12 greatest entrepreneurs of our time

In the early 1970s Muhammad Yunus was teaching economic theory to students in a university classroom in Bangladesh. But outside the campus of Chittagong University, all he saw was crushing hunger and poverty. His desire to do something to help the local citizens led to a simple but powerful gesture: Yunus loaned $27 to destitute basket weavers in a village next to his university's campus.

He could not believe the excitement the small amount of money caused. For people living on pennies a day, just a few dollars could transform their lives -- and in many cases it did. The gift was used to support and expand these very small businesses, and that helped many overcome their poverty. Much to Yunus' surprise, the basket weavers actually paid off the loans -- and on time too. He then moved from one village to the next, finding all sorts of entrepreneurial projects to fund.

It wasn't until 1983 that Yunus founded Grameen Bank, the institution that helped pioneer and spread the concept of microcredit. By the time Yunus won the Nobel Peace Prize in 2006, the Grameen Bank had outstanding loans to nearly 7 million poor people in 73,000 villages in Bangladesh. More important, Yunus, 71, helped create a global movement toward microlending. The Grameen model moved on to more than 100 countries worldwide and helped millions.

While the bank could not eradicate poverty, it lifted many lives. No less critical, Yunus' idea inspired countless numbers of young people to devote themselves to social causes all over the world.

 

May 31, 2012 at 03:16 o\clock

Yunus concerned over Grameen Bank future

DHAKA: Nobel laureate Professor Dr Muhammad Yunus, also founder of the Grameen Bank, has expressed deep concern over the future of the bank.

The Nobel laureate also expressed apprehension that the Grameen Bank, holding the concept of microfinance for last 30 years, would be taken over by the government.

On March 2, Yunus was finally removed as Managing Director of the Grameen Bank as a Norwegian media documentary on shady fund transfer rattled his position in his micro-finance institution.

Assigning the reason for sacking the Nobel Peace Prize winner from his post the notification states that according to the Grameen Bank Ordinance-1982 and the Company Law of Bangladesh Bank, after 60 years of age, nobody is allowed to hold the post of Managing Director of any bank of Bangladesh. If anybody wishes to hold the post, he has to take permission from Bangladesh Bank.

For reviewing the ownership of the bank and of 54 related social businesses that are still headed by Yunus the government set up a commission.

Dr Yunus said, in a statement, “I believe without doubt that Grameen Bank’s future will be endangered if the government raises its role in the bank by changing its legal structure.”

“I am now extremely worried about the possibility of Grameen Bank being taken into government control. I fear even to anticipate the course that Grameen Bank will take if it is made a government institution,” he said.

Yunus is seen as one of the world’s leading anti-poverty activists and his sacking from Grameen Bank, apparently on the orders of the government, sparked widespread international anger.

Three weeks ago, US Secretary of State Hillary Clinton heaped praise on Yunus during a visit to Dhaka and called for Grameen Bank’s work to not be undermined as it had helped millions of women.

On March 22, US Assistant Secretary of State for South and Central Asian Affairs Robert O Blake capped his visit with an implicit note of caution that the bilateral relations between Dhaka and Washington would be affected if the Bangladesh government failed to find a ‘compromise’ formula for an amicable settlement of the problem with Nobel laureate micro-credit guru Dr Yunus.

Failing to have a compromise on the Yunus issue “will have an effect on the bilateral relations” between Bangladesh and the United States, he said before leaving Dhaka.

Feb 28, 2012 at 21:20 o\clock

Yunus bid to get US 'consideration': Dan Mozena

by: bangladesh   Keywords: Mozena, US, ambassador, Dhaka

Feb 28, 2012 — The US ambassador to Bangladesh, Dan Mozena, has said that Washington will give its "fullest consideration" to the candidature of Muhammad Yunus for president of the World Bank.

"I am sure if he agrees to his nomination for this position, it would be given the fullest consideration," Mozina told journalists in the northern city of Rajshahi.

The US envoy's remarks came a week after the prime minister, Sheikh Hasina, proposed that Yunus be made the chief the Washington-based bank that has never seen a non-American as its head since its birth after the Second World War.

Hasina floated the idea during a meeting with a delegation of European MPs in Dhaka on Feb 22.

"I know Grameen Bank very well. You may not know ... I lived in Bangladesh a decade ago. I lived here for three years, from 1998 to 2001. And during that time, I visited so many Grameen borrowers' groups," Mozena said.

"I saw with these very eyes ... these very eyes right here, the impact of Grameen Bank in helping the poorest of the poor and the most vulnerable of the vulnerable women take control of their lives. It's a beautiful sight.

"... I feel so inspired and I think of the work, of the vision of professor Muhammad Yunus as it was his idea."

SAGAR-RUNI KILLING
Taking queries from journalists on the gruesome killing of journalist couple Sagar and Runi, the US envoy said, "I do not know if its related to the fact that they were journalists."

"If it were, then that is even more heinous, because I believe and my government believes, the media, the press is a fundamental element of democracy. There can't be democracy without free and vibrant media. And so if that attack was against the media, then it is even more horrific."

On Feb 11, Maasranga Television news editor Golam Mostofa Sarowar, alias Sagar Sarowar, and his wife ATN Bangla senior reporter Meherun Nahar Runi were found murdered at their rented flat in the city's west Rajabazar. Police are yet to arrest anyone or name any suspect.

On Sunday, the investigators said they are 'almost certain' about the motive behind the killing of the couple but would not disclose it for the sake of investigation.

"Police of Bangladesh, to my understanding, are actively investigating this case," Mozena said adding that the US government has a number of skills development programmes with Bangladesh police, knowledge from which he is 'sure' is being put to good use in the probe.

However, when asked specifically whether the US government is directly involved in the probe, the US envoy said, "We have not been asked for any support."

Nov 11, 2011 at 23:47 o\clock

Expand social business with the help of IT

by: bangladesh   Keywords: IT, Grameen, Yunus

Nobel laureate Prof Muhammad Yunus yesterday said information and technology should be used to expand social business. He made the observation in a public speech at the third Global Social Business Summit in Vienna, Austria.

In his speech, Prof Yunus also emphasised on social business and urged different companies to come forward in this respect.

“Nowadays everybody holds the Genie of Aladin in hand. In the story, Genie emerges with the touch of hand… Genie is the cell phone having internet connection,” said Dr Yunus.


Citing example, he mentioned that cell phone enables a pregnant woman to know about the condition of her unborn child only by answering some questions through it.

“Cell phone should not be considered only as a medium of income but an opportunity to solve many problems,” said Prof Yunus.

Nasa astronaut Ronald John Garan, who returned to earth on last April after a six-month stay in the space, also expressed his support for social business during his speech.

“I extend my thanks to you [Yunus] for what you have done for the people of this fragile world. This book has travelled with me in the space mission. It rotated around the axis of the earth 2,624 times. The book has travelled 6,53,37,600 miles at a pace of 17,500 miles per hour,” Ronald wrote in the book before presenting it to its writer Prof Yunus.

The activities on the second day of the conference were followed by the presentation of success stories and projects of different companies involved in social business.

The companies are Intel, Violia, Mammu, Village Boom, BASF, Good B and Grameen Creative Club. The presentation was followed by a video message sent by Hollywood star Hugh Jackman wishing the conference a success.

Prof Yunus also explained how Jackman became a Yunus-follower after reading his book 'Banker to the poor'. UNTID Chief Philip Dousey Beji spoke on the occasion, focusing on poverty alleviation and Millennium Development Goal.

Two panel discussions--'Social Business and Globalization' and 'Civil Society and Political Structure for Social Business'--were included in the second day schedule of the summit. [source: Daily Star]

Aug 13, 2011 at 16:44 o\clock

Nobel winner Yunus promotes social business

by: bangladesh   Keywords: Yunus, Clinton

WASHINGTON (AP) — The bruising dispute with Bangladesh's government that saw Muhammad Yunus ousted as chief of the Grameen Bank has not diminished the Nobel laureate's enthusiasm for business projects to help the Asian nation's poor.

Cellphones, drinking water, yogurt for malnourished children and solar power for rural homes are all part of the dizzying network of Grameen initiatives. Yunus chairs the board of many of them despite being forced out as the bank's managing director in May.

Yunus was in Washington this week beating the drum for his concept of "social businesses" that aim to find commercially viable ways of tackling poverty.

He received a hero's welcome Friday at a conference of development specialists. On Thursday, he met Secretary of State Hillary Rodham Clinton. A State Department statement said they discussed the Grameen Bank and "the United States' interest in further success of Bangladesh's vibrant civil society ... which has lifted millions of people out of poverty."

Such praise is a far cry from the the bumpy ride he's had this year at home, where Prime Minister Sheikh Hasina has accused Grameen Bank and other microfinance institutions of charging exorbitant interest and "sucking blood from the poor borrowers."

Still, Yunus, who obtained his economics doctorate in the United States then returned to Bangladesh after its bloody 1971 war for independence, has no plans to leave his homeland.

"Not a chance," he told The Associated Press.

In 1983, he founded the Grameen Bank, pioneering the idea of issuing small loans to the poor, which has been replicated around the world. The work earned him and the bank the 2006 Nobel Peace Prize. The bank now has about 9 million borrowers in Bangladesh, virtually all women.

But in March, the central bank removed the 71-year-old as Grameen's managing director for violating government retirement regulations, which he disputes. Despite expressions of concern from the United States and a group of elder international statesmen over Bangladesh's treatment of Yunus, he was left with no choice but to comply with the order after the nation's Supreme Court upheld it.

Yunus has long had frosty relations with Hasina. She was reportedly angered by Yunus' 2007 attempt to form his own political party, backed by the powerful army, when the country was under a state of emergency and Hasina herself was behind bars.

A Bangladesh government-appointed investigation in April found that Grameen Bank violated its charter as a microlender by creating affiliates that did not benefit the bank's shareholders, and recommended the government integrate those affiliates with the bank. Yunus maintains these social businesses are independent and should remain so.

Yunus on Friday steered clear of the bank controversy but acknowledged that his difficult relations with the government are an obstacle to the social businesses.

May 30, 2011 at 17:01 o\clock

Exclusive Interview with Professor Dr. Yunus - Leave Grameen Bank alone

Leave Grameen Bank alone

[Courtesy Daily Star 26/5/11]

Professor Muhammad Yunus talks with Arun Devnath and Md Fazlur Rahman of The Daily Star in an exclusive interview, the first after his resignation from Grameen Bank.

The Daily Star (DS): You have often said misconceptions float around Grameen Bank. What are they? Which misconceptions upset you the most?

Muhammad Yunus (MY): The very common misconception is, Grameen is an NGO, but it is not an NGO because it is a commercial organisation. It has owners and all the features of a business. Grameen Bank is a special organisation, not just another bank. But people like to see it in their own way and put a label on it.

Some think that Professor Yunus owns this bank and is earning a lot of money out of it. I do not own a single share in the bank. I was just an employee.

Now the government is promoting an idea that it is a government bank, which never existed in the minds of the people. Even the review committee report gives the impression that it is a government bank and their entire mental setup was based on the misconception that we are public servants.

To call it a government bank, it has to be owned by the government as the majority shareholder. Even in private banks, the government may have some shares. It does not make a private bank a government bank. In Grameen Bank, the government has effectively a 3.5 percent share, while 96.5 percent shares belong to the borrowers.

The only argument the government is using to try to justify its claim is that Grameen Bank is created under a special law of the government. Even AsianUniversity for Women in Chittagong has been created under a special law. But it is not a government university. It is a private university. The vice-chancellor of the university is not a public servant. How come suddenly we have become public servants?

Grameen Bank is a bank under a charter. That the government created a charter does not mean it is a government bank. It is another misconception that is floating around.

The other misconception is this bank is run by foreign donations. People think that Professor Yunus goes around the world and brings in money, but that is a gross misunderstanding. Since 1995, GB has not received any money from outside. At that time, it was decided unilaterally not to receive money from outside. The money now comes from deposits and is lent to borrowers.

Grameen Bank has now more than Tk 10,000 crore in deposits. Of that, Tk 6,000 crore is coming from borrowers. GB does not take money from outside; rather, it is generated from internal sources. The bulk of the fund is the fund of the borrowers themselves. It is a self-reliant bank.

The other misconception is Grameen Bank charges a high rate of interest. I can say GB has the lowest among all MFIs (microfinance institutions) in Bangladesh. It has been repeatedly proven. Luckily, the review committee has endorsed our claims.

Some doubt whether microcredit activities have any impact on the lives of the poor. They claim that the poor are becoming poorer. GB has 83 lakh borrowers who constitute a major part of the total microcredit borrowers in the country. Whether we did it or someone else did it, the poor are definitely not getting poorer.

These poor people have Tk 6,000 crore in deposits in Grameen Bank. You cannot say there is no impact on their families. Their children are in schools, GB is giving them education and scholarships. So, a new generation is coming out of this.

If you are looking for the impact, there are many ways to see that. You can look at savings, loans, deposits, children and the quality of housing.

It is not that everybody has gained from it. There might be some who could not. It is as following: You open a school, you take students and in the final exams, not everybody gets first class. Some get first class, some get second, some get third. People used the money in different ways -- under different circumstances. Some lost out, some gained a little bit while others gained a lot.

If you look at women's empowerment, you have to see they own the bank. They have got their own money in the bank. They can deal with an institution. It is a big thing.

DS: How do you define the relationships between Grameen Bank and its associated organisations or companies? How were the associated organisations formed? Explain the shareholding pattern, sources of funds and revenue/profit sharing.

MY: Grameen Bank was set up to help the poor, particularly women, in income generating activities by providing collateral-free loans. Along the way, I saw many other problems of the poor. How to get them out of the poverty trap was always on my mind. I started reacting to each problem.

When I saw a problem, my instinctive reaction to solve the problem was to create a business. So I created a company. I went on and set up company after company. Whenever I created an organisation, I used the "Grameen" name for it -- to make it known that it was part of a series.

The word, Grameen, came from me, not from the bank. It was like a pet name from me. I like it. People know that I am involved with it. The Grameen name does not have a trademark right. You cannot register this word as a trademark, as it is an adjective.

I liked the word Grameen as it carries my association with it when I set up any company. None of them has any link, legally, with Grameen Bank. Each one is an independent organisation. Even the review committee was confused about it. They arrived at the idea that all these belong to Grameen Bank and we must do something about it as Prof. Yunus is making a mess of it. They have made strong recommendations about them, without trying to understand what these organisations are.

They are all legally independent and registered with the Office of the Registrar of Joint Stock Companies and Firms. The Grameen Bank Ordinance does not allow Grameen Bank to create any other organisation. The review committee says Grameen Bank has violated rules by creating companies, but we have not violated any rule because Grameen Bank has not created any organisation.

I have created all these organisations in my personal capacity and as a volunteer, not as the managing director [of Grameen Bank].

I do not think becoming members of many boards while working as an employee of Grameen Bank creates any conflict of interest. Most of them are non-profit organisations, so there is no conflict in that sense, as the board members do not gain personally from these. It is not a conflict of interest. It is rather about supplementing each other, as we are trying to address certain problems, not make personal gains out of it.

Most of the companies are non-profit. A few of them are for-profit. All the for-profit companies are owned by non-profit companies. So, there is no way anybody can gain personally from them.

Nobody, including me, owns shares in these companies personally. Our colleagues on board do not get any honorarium or financial benefits or fees for sitting on the board.

Once a non-profit owns a for-profit, the money goes to the non-profit. Individuals do not get it; rather the non-profits get it to promote their objectives, reaching out to the goals they have set for themselves. Many charity organisations rent out places and do other thing to earn money so that they can run their charity organisations. There is nothing unusual about it.

When I created these companies I needed money to start them. Sometimes it came as a donation. In many cases, I created the business so that it continuously brought in money itself and could grow. Grameen Shakti, a good example, has grown big. It started in a small way and then we started selling solar home systems, which made revenues. We reinvested and made more. Luckily, the government created IDCOL, which was looking for this type of an organisation to finance. We borrowed money from IDCOL and continued to grow.

The seed money for these companies did not come from Grameen Bank. There are two entities which received seed money from Grameen Bank: Grameen Kalyan and Grameen Fund. The seed money for these two companies came from donor money. Donors gave the money for special purpose activities, not for regular Grameen Bank activities. One is called Social Advancement Fund and the other is Social Venture Capital Fund.

These funds were created inside Grameen Bank. What we did was, we created independent companies and put the money into these independent companies as loans and purpose oriented grants. This money was not given to Grameen Bank to carry out its core activities.

Each of the companies, such as Grameen Healthcare Services, which was set up later, found a donor or an investor, or took a loan to start the business. One thing must be clear that these are independent creations and are not legally connected with Grameen Bank. There may be institutional connections. For example, Grameen Kalyan provides healthcare services and has a focus on Grameen Bank borrowers. Grameen Shikkha looks after the educational programmes for Grameen and non-Grameen families. They supplement each other.

DS: The review committee suggested that the government merge all associated companies under Grameen Bank. What's your reaction?

MY: The proposal to merge all associated companies bearing a Grameen name or related to Grameen Bank in some way came from a big misconception. The misconception is that all these companies are part of a conglomerate, meaning that Grameen Bank is the mother of all these organisations.

Once you know that they are not, the recommendations become meaningless. And that is what it is. I am sorry that the review committee did not have enough time to study and understand what these organisations are.

The review committee had a very limited time and had no prior experience of Grameen Bank. Grameen Bank is not an ordinary organisation. It is a very originally designed organisation with an innovative character. It is not only an innovative and unique organisation. It is an important organisation -- locally and globally.

You do not see any parallel to it in any other country. Members of the Review Committee had no experience with Grameen through their professional exposure. You are inviting people to do a job they are not prepared for. I feel sorry for them that they had to undertake such an assignment.

DS: Did the review committee visit the Grameen Bank headquarters?

MY: During the review, the committee members did not visit Grameen Bank. They did not visit branches of Grameen Bank to see what Grameen Bank is. They did not meet the borrowers of Grameen Bank. Maybe some of them individually met some borrowers in the past, but as a body, as part of the committee work, it never went on site to see what Grameen Bank really is.

They did not talk to the staff of Grameen Bank. The committee talked to me for an hour when I went to them and answered a few questions. Additionally, they talked to the deputy managing director for a few minutes.

For an organisation that has been running for 34 years and working all over the country and which won a Nobel Peace Prize, a one hour discussion with the CEO of the company does not give you the feel of the company, nor does it give the sense of what it is all about.

The committee had preconceived notions and perceptions about Grameen Bank. Based on their perceptions, they made the recommendations. It was very unkind to give such a big task to them. It is extremely unkind for Grameen Bank to receive those recommendations. After all, we should not take Grameen Bank so lightly.

I think they have studied books and papers on GB but the physical contact, when you are making such important recommendations, is important. It is like you are asking someone who is living in Sierra Leone to amend the constitution of Bangladesh. Would you do that when you did not know the society and their aspirations?

The report said the committee depended highly on one person on legal matters. That person is a highly biased person. I do not know whether he had ever visited Grameen Bank, had a chance to see and understand how it works, or checked through the legal structure of one of the organisations with the Grameen name.

They even recommended that these two organisations [Grameen Kalyan and Grameen Fund] should become "departments" of Grameen Bank. Both are independent companies. How could any one make a recommendation like that? They were so innocent about the legal issues.

The committee could have taken help from other lawyers, sit down and spent a day with them to understand the legal issues, before they made recommendations about a nationally and internationally important institution.

They could have invited the board members -- all board members of Grameen Bank, or at least nine of them who came from villages. They could see their faces, they could have had a conversation with them. After all, they represent millions of borrowers. It is their bank. The committee never consulted the representatives of the people who own 96.5 percent of the bank. Then the committee stated that they are illiterate women!

By meeting the borrower representatives in the board, the committee could assess whether they have any understanding of their bank. This would have given the committee an understanding of what type of a board Grameen Bank has.

DS: According to one observation, Grameen Bank has a rubber-stamp board of directors and women directors don't have an independent voice in the state of affairs. What's your response?

MY: It is not a rubber-stamp board. Grameen Bank has nine seats in the board for the elected borrowers and they come from around the country, which is divided into nine constituencies. A borrower who has a board membership has to be elected at centre level, branch level, area level and zonal level to finally make it to the board. She has to be an outstanding person.

DS: The report said it is a personality-based organisation -- one person decides everything. What's your take on it?

MY: I think this is a very humiliating remark for the board. If the committee had met the board, they probably would not have said such an offensive thing. The Grameen Bank board from the beginning has been headed by the chairmen, who are very distinguished persons of the country. It started with Professor Iqbal Mahmud, then came Professor Kaiser Hossain, Dr Akbar Ali Khan, Professor Rehman Sobhan and Mr Tabarak Hossain.

They are outstanding people of the country. The government has two other nominated board members because they have 25 percent shares in the bank. They were always at the level of secretaries -- active secretaries, not retired ones. Currently, the defence and cultural affairs secretaries are on GB's board.

We always tried to make decisions on the basis of consensus. If there was serious opposition and one was not yielding and insisted that it should not be done in a certain way, then we withdrew that item from the agenda.

We came back to the next board meeting after redesigning the proposal. The board paid attention to all views. Now we are told that it is a rubber-stamp board. It is again a misconception.

It is not that Professor Yunus (or the chairman) dictates everything. It is because what the management proposes is so reasonable and simple. Grameen Bank is not giving loans to big companies that could be debated. It was a routine process. There are not too many things that needed to be strongly debated.

DS: What's your view on the educational level of the nine women board members?

MY: Some of them have some level of education but not higher level. But the important thing is that they bring the reality to the board. If the review committee had sat with them, their recommendations would have been completely different. Then I can guarantee that they would not have made the unfortunate comments about them in the review report, as they have done now.

They bring the reality of life, and the ground realities are reflected in the board. Sitting face to face with them, the tone and the attention level of the seasoned secretaries change. Every time we meet, we talk about how their life is, how the centre is doing, any important news from their centre and how the beggars in their centre, who are also the borrowers, are doing.

When the women board members come to the meeting, they come with many ideas. They suggest things to do because it is their life. They say our husbands suffer so much and our children suffer so much. 'Can you do something about this?' So, passing remarks such as -- 'they are illiterate and what can they contribute? Do they know about banking?' -- is very sad.

DS: What's your reaction to another recommendation that the Grameen Bank Ordinance should be amended? What do you fear the most about any amendment to the ordinance?

MY: We have an ordinance. We needed some amendments to improve it. These amendments were done during the caretaker government's rule. When this government came, it did not present these amendments to the parliament for approval. So we were back to the pre-amendment ordinance. But this ordinance has worked well for us. This ordinance has created the winning institution, which brought the nation global recognition, brought us the Nobel Peace Prize. This ordinance has created the winning management team to make all these happen.

Should we now rush to change the law that produced a winning team and a winning institution? Even the age-old advice says: "Don't fix it, if it is not broken". In the case of Grameen Bank, it is not only not broken, it just got its Nobel Peace Prize. It is in its best shape.

Definitely, I will not take review committee's words seriously. They were time constrained, expertise constrained and biased. Maybe they want to amend it to make it more government-controlled, which will be terrible, simply disastrous.

Who would want an organisation that is running and winning to be handed to the government? While the government is trying to privatise banks, why should we now take a private bank and nationalise it? The moment the government influence comes into an institution like this, it gets caught in political in-fighting, the kind of thing we had seen. That is the end of the story. It will never be the same bank again.

It is a private organisation. Right from the beginning, I was saying that it should be owned by the poor people.

The original ordinance kept 60 percent ownership to the government and gave 40 percent to the borrowers. That's not the ownership pattern I was lobbying for. At that time, the finance minister assured me that he will change it to make the borrowers the majority shareholders. His successor picked it up and amended the ordinance to make it 75 percent for borrowers and 25 percent for the government. But in reality today, the government only has a 3.5 percent share; the remaining 96.5 percent is with the borrowers.

A few amendments that we have been pleading for many years was to have the chairman elected by the board, instead of being appointed by the government, to allow Grameen Bank to operate in urban areas (which is not allowed now), and reduce government ownership to a token amount of under 5 percent. The caretaker government accepted and introduced the first two amendments. The selection of a chairman by the government remains as an opening for politics to creep in. If the chairman is appointed by the board of Grameen Bank, it will be protected from political intervention.

DS: The review report claims that Grameen Bank has a tendency not to follow rules and regulations. How do you respond?

MY: It's again based on a basic misconception. The committee thought all these Grameen companies belong to Grameen Bank. Once you think that way, you start seeing violations, such as, the violation of creating companies that was not allowed by law, and violations of allowing business with each other. The review committee never had a chance to interact with these companies, but they guessed that there must be a chaotic situation out there.Grameen Bank does not have a tendency towards violating any rules. It has always tried to follow the rules and procedures in a transparent manner. It is a very law-abiding bank. Grameen Bank does not violate rules because that's the foundation on which Grameen Bank stands. Grameen Bank is based on trust. Without total commitment to rules and discipline, trust cannot survive. As a result, Grameen Bank cannot survive.

DS: Why did you not retire when you turned 60?

MY: I offered to resign when I was 60, but the board did not let me go. The board said: "We are the appointing authority and you should continue." Grameen Bank's regulations allowed it. The board said: "You continue until we tell you [to retire]."

I turned 70 and again I offered my resignation. The board said we will not let you go. I tried all the time, but the board was telling me to stay. I wrote a letter on March 15, 2010, to the honourable finance minister, offering to step down. He thought my proposal was a good one.

The question was whether it was a violation of the law. There is no violation. The board said it was very important for me to continue. The board also said the law does not stop them. The board created the regulation. They made the regulation that the managing director does not have an age limit.

This issue of me going over the retirement age was raised by the audit teams of Bangladesh Bank. That team said you are going over your age-limit. We gave our explanation. We explained that there was no age-limit for the managing director of Grameen Bank.

They looked at our explanation. The next year, the issue was discussed in detail. We told them we are ruled by our own regulations. Under the ordinance, we created the regulations.

The audit team told us to bring all our papers. We brought all our papers. There were six people, chaired by the Bangladesh Bank general manager, reviewing these documents. When they saw all the documents, they said you are OK. At the time I was sixty and a half years.

Ever since then, Bangladesh Bank never raised the issue again. That means they had no objection to it. No question was ever raised again since then.

Suddenly the central bank came up eleven years later with a letter. If you discover a mistake 11 years later, you suddenly do not send a letter to fix it. You can pick up the phone, say a sorry we have made a mistake, we missed it and you missed it and let's sort it out. That is how it could be addressed.

I cannot say why they sent the letter after 11 years. I did not think it was legally correct. So I went to court. But the high court said I do not have the locus-standi to seek redress. They did not accept my case. Supreme Court upheld the High Court decision.

DS: What is the future path for Grameen Bank without you at the helm?

MY: Grameen Bank is at a very interesting stage right now. The second generation within Grameen Bank borrowers' families is becoming adults -- in large numbers. We have helped them go to school and finish school. Many went for higher education with Grameen Bank loans. They are completely different from their mothers. They grew up within a Grameen Bank environment. Grameen Bank's policy has been to create a new generation who will not only be free from poverty, but from this generation on, nobody will ever return to poverty. We have been encouraging them to become job-givers rather than being job-seekers.

The future of Grameen Bank could be an exciting journey of exploring new grounds. It could be a glorious journey. But if GB does not manage the transition carefully, it could end up a disaster. A friendly transition is the key to a successful future. We have already damaged that process. But we still have a chance to do damage-control by insisting on smooth continuity, by leaving the existing ordinance alone, by not trying to bring government control, by respecting the decision-making power of the board, by accepting my proposal to the finance minister in March last year, to appoint me as the chairman and by selecting a non-political person of high standing as the next managing director. Grameen Bank is a precious institution. It has demonstrated its ability to govern itself with world-class efficiency. If we keep it that way, we will not have to worry. We can relax and expect more success ahead for Grameen Bank.

DS: What's next in your efforts to help the poor? What's next in your life as a private person (as Muhammad Yunus)?

MY: I started out concentrating on the issue of poverty alleviation. All the companies I created are all focused on that. I will continue with that. I have no intention to slow down. I cannot even if I try to. I will continue -- some people may like what I do, some may dislike it, or some may even hate it. I will go on doing things that I think is the right thing to do. I get the feeling that my way of approaching world problems particularly appeals to young people. I enjoy working with them.

My work comes from a faith that all human beings have unlimited capacities. But society does not allow people to become acquainted with their capacity. We can start to create an environment where people will gradually start discovering themselves.

A part of poverty is because people are not aware of their own capacities. Most of the time, people are made dependent. They are being told that the state will take care of you, or the market will take care of you. They are turned into passive beings. We are not encouraging the person to discover his own inherent capacity to take care of himself.

I want to find ways to encourage people to explore their capacities, to give them a chance for self-help. I am not saying 'do not help them'. I am saying that the important part of the help should be to help them gain independence, not to get used to dependence.

On top of that, I strongly feel that each individual has the capacity to change the world. But he does not always get to use this capacity. We think we are too small to change anything. I want everybody to believe that he is big. He can change the world. He can come up with fantastic ideas. Human creativity is just limitless. We must believe in it.

This generation of young people is very different from ours. They have technology, internet access and are connected with thousands or even millions of others. If they can use the technology, they will be able to change the world much faster than we can imagine.

I started social business to solve social and economic problems. Young people are responding to that call. Many universities have opened their own institutes of social business, centres for social business and chairs for social business in countries such as Germany, the UK, the USA and Japan. Many are coming along in this direction, such as India, Russia and Colombia.

I see the positive responses from people. I see the possibilities. If the idea of social business catches up, it will bring a big change in the economy and the society. My mission will be to concentrate on that and make young people think big and get involved, rather than feel frustrated and withdrawn. I believe the young generation will transform the world in a fundamental way.

May 12, 2011 at 15:56 o\clock

Professor Muhammad Yunus has Handed-over the Charge of Managing Director

May 12, 2011

I am today relinquishing the post of Managing Director of Grameen Bank on the basis that the Deputy Managing Director Mrs. Nurjahan Begum would hold charge until a Managing Director is appointed in accordance with the procedures under section 14 of the Grameen Bank ordinance. Since the board of Grameen Bank is my appointing authority, it may take appropriate steps.
I have still not received the Appellate Division's full order. I am taking this step without prejudice to the legal issues raised before the Supreme Court, and in order to prevent undue disruption of the activities of Grameen Bank and to ensure my colleagues and our 8 million members, and owners of the bank, are not subjected to any difficulty in discharging their responsibilities.

I hope Grameen Bank will continue to operate maintaining its independence and character under the Grameen Bank Ordinance and move towards even greater success.

May 11, 2011 at 00:00 o\clock

COMMISSION - GRAMEEN BERLIN

by: bangladesh   Keywords: Berlin, Branch, Grameen

The research group Grameen Bank Berlin will examine the establishment of a Grameen Bank affiliate in Berlin - like the one in New York, USA. If the chances are positive, the research group will start certain initiatives for its creation.

Winner of the Nobel Peace Prize Prof. Muhammad Yunus, founder of the Grameen Bank would like to open a branch in Berlin. If all goes well, he will personally coach the team.

Members of this research group are:

  • Prof. Dr. Stephan Breidenbach, Humbold-Viadrina School of Governance (Leiter)
  • Michel Aloui, BrandStiftung
  • Friedrich Kiesinger, CEO Pegasus GmbH, Berlin
  • Tobias Klein, First Private Investment
  • Ulrich Merkes, Deloitte
  • Klaus Naderer, CEO Solidground
  • Dr. Stephan Schwartzkopf, Gesellschaft für Projektmanagement
  • Johannes Schwegler, Swisscontact
  • Alois van Well, Direktor Dresdner Kleinwort Wasserstein
  • Prof. Dr. Alexander Kritikos, Deutsches Mikrofinanzinstitut
  • Dirk Sander, Finanzvorstand vom Öko-Sozialem Forum Deutschland

-Mir Monaz Haque, Berlin

May 8, 2011 at 01:45 o\clock

Let Grameen Bank flourish further

by: bangladesh   Keywords: Appeals, Prof, Yunus

Appeals Prof Yunus

Dhaka May 7, 2011: Grameen Bank's future is connected with 40 million borrowers, and it should be ensured that its achievements in the last four decades are not undone, Nobel laureate Prof Muhammad Yunus said in a statement yesterday.

"Now our challenge is to create the opportunity so that the second generation of Grameen Bank borrowers can move away from poverty forever. This should now be our goal and we should strive to achieve this goal as quickly as possible," Prof Yunus said.

"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 over 80 lakh borrowers."

About his own course of life, the Nobel laureate hinted that he would be working with the young generation from other platforms to address the problem of poverty at home and abroad.

"Through social business, I will ensure that my initiatives continue. I am inviting all to join in and participate in helping solve the problems afflicting our country," the microcredit pioneer said.

Prof Yunus said it has to be ensured that Grameen Bank, which created the opportunity for poor women across the country to express their latent abilities, continues to achieve more success.

"There is a growing doubt as to whether any civil society can survive and retain its character and independence in this politically-influenced environment," the Nobel laureate said.

"There is doubt as to whether Grameen Bank or similar civil society initiatives can be continued with their own identities and autonomy in this environment. It is an important task to protect Grameen Bank's identity and ensure that poor people remain as its owners."

"Let us make sure that Grameen Bank, the bank, which created the opportunity for poor women all around the country to express their latent abilities, is able to continue to achieve more success. At the same time let us work to make sure that all the initiatives from the civil society can move forward without hindrance and at a fast pace," Prof Yunus said. [sourche: The Daily Star]

May 2, 2011 at 11:04 o\clock

HC verdict on Yunus wrong, biased: counsels

by: bangladesh   Keywords: Yunus, High, Court

HC verdict on Yunus wrong, biased: counsels

[Star Online Report] Counsels of Muhammad Yunus on Monday termed a High Court verdict over the Nobel laureate’s removal from Grameen Bank as “wrong and biased”.

Shutting down nuclear power plants will be costly Pointing out that the HC summarily rejected Yunus’ petition challenging his removal and did not issue any rule upon Bangladesh Bank for explaining its letter that removed Yunus, Dr Kamal termed it as a “denial of access to justice” and unprecedented.

He was placing his arguments before an Appellate Division bench during the hearing of two petitions filed seeking withdrawal of SC order that dismissed Yunus’ leave-to-appeal petition against a HC verdict that upheld a Bangladesh Bank order to remove him from the post of managing director of Grameen Bank.

Chief Justice ABM Khairul Haque heads the seven-member bench. After submission by three of Yunus’ counsels – Dr Kamal, Barrister Rokanuddin Mahmud and Mahmudul Islam, the court adjourned the hearing till Tuesday.

Apr 25, 2011 at 21:42 o\clock

Professor Yunus cleared of fund transfer charge

by: bangladesh   Keywords: Yunus, cleared, grameen, fund

Bangladesh probe finds no irregularities in microfinance pioneer Yunus' transfer of funds

Shutting down nuclear power plants will be costly DHAKA, Bangladesh (AP) April 25, 2011 -- No irregularities were found in Nobel laureate Muhammad Yunus' transfer of Norwegian development funds from his Grameen Bank to another venture, Bangladesh's finance minister said Monday.

Yunus' idea of giving tiny loans to the poor without any collateral spurred a boom in such lending across the developing world, earning him and the bank the 2006 Nobel Peace Prize.

He had denied wrongdoing after a Norwegian television documentary accused him of transferring funds in 1996 without prior approval.

On Monday, Bangladesh's Finance Minister Abul Mal Abdul Muhith said a committee that formed in January to investigate had cleared him of wrongdoing in the transfer.

Pressure from the Norwegian Embassy in Dhaka resulted in the funds being transferred back in 1998, and Norway has already said there was no indication Grameen was engaged in corruption or embezzlement.

The committee was assigned also to make recommendations to the government about any future decision to regulate the bank.

"We have recommended provisions in a way so that the government can make proper decisions to regulate the bank in the future," A.K. Monowar Uddin Ahmed, who heads the committee, told reporters after submitting the report.

The central bank earlier this year ordered Yunus out of the microfinance bank he founded because of retirement law violations. He denied it and alleged the government was trying to take control of his bank.

He lost a Supreme Court appeal in that case, but related cases are pending. The committee's findings about the fund transfer are unlikely to impact his removal.

The United States and some European nations want the government makes a respectable compromise with Yunus, but the government of Prime Minister Sheikh Hasina says the legal system will resolve the issue.

The microlending bank has nearly 9 million borrowers in Bangladesh, 97 percent of whom are women

Apr 22, 2011 at 22:57 o\clock

Unsecured Personal Loans - Grameen After Yunus

by: bangladesh   Keywords: Loan, unsecured

With Muhammad Yunus apparently about to be driven from an operational role at the institution that he founded and which provides micro-financing to as much as 20 percent of Bangladesh’s population, what path will Grameen Bank take without him?

Bangladesh Prime Minister Sheikh Hasina Wajed for months has been waging a campaign to drive the Nobel Peace Prize laureate out of the bank, apparently, according to widespread reports in Dhaka because of jealousy. Although the lower courts have ordered Yunus out of the bank because he has passed the statutory age limit, the Supreme Court has yet to make a final decision. The court is expected to deliver its ruling on April 4.

The government of Bangladesh appears to be mounting a concerted campaign oust Muhammad Yunus and take over the Grameen Bank.

Apr 21, 2011 at 22:15 o\clock

Grameen After Yunus

by: bangladesh   Keywords: Yunus, Hasina, Muhit

Grameen After Yunus
Written by Nava Thakuria                                                         Furl it!Mister.WongNewsVineRedditYahooMyWebTechnoratiDigg          

Friday, 01 April 2011

A Bangladesh Supreme Court ruling is expected Monday that could remove him from the bank

With Muhammad Yunus apparently about to be driven from an operational role at the institution that he founded and which provides micro-financing to as much as 20 percent of Bangladesh’s population, what path will Grameen Bank take without him?

Bangladesh Prime Minister Sheikh Hasina Wajed for months has been waging a campaign to drive the Nobel Peace Prize laureate out of the bank, apparently, according to widespread reports in Dhaka because of jealousy. Although the lower courts have ordered Yunus out of the bank because he has passed the statutory age limit, the Supreme Court has yet to make a final decision. The court is expected to deliver its ruling on April 4.

The action against Yunus has stirred concern among international investors, who have only relatively recently begun to look favorably on Bangladesh because of its economic reforms and with the health and welfare of its 140 million citizens steadily improving. In particular the country has become a center for garment assembly and re-export, totaling $12.3 billion in FY2009.

In an interview with Asia Sentinel late last year, Yunus said simply that Grameen Bank is an institution that will go on now without him. The bank today has the equivalent of US $1.4 billion in deposits and more than 8.3 million borrowers, amazingly 97 per cent of them women. The bank maintains over 2,560 branches in 81,373 villages. With staff of nearly 22,250, the bank has disbursed 576.83 billion Bangladesh takas (US$9.87 billion) as loans to the poorest.

More than 75 percent of the shares in the bank are owned by poor Bangladeshi women. Their support and cooperation will be vital for the bank’s identity and character. Without Yunus somehow connected to the institution, it could well lose its credibility. The banker has suggested that the present deputy Managing Director, Nurjahan Begum, who he said has already proved herself to be an efficient, competent administrator, should be elevated to the post of managing director.

"I have all concern for the 8.3 million Grameen borrowers. Their interest should not be ignored at any level," Yunus said. However, he added that Grameen has what he called efficient and dedicated officials who would run the institution fairly well.

In fact, he said, he sought a graceful exit from the bank as early as March of 2010, sending a personal letter to the Finance Minister AM Muhith, saying he was ready to "hand over the responsibility of this organization to the second generation."

In his letter, he proposed two options for the transition of power. In the first option, he offered to step down from the post of managing director to be appointed non-executive chairman of the bank board.

It appears the Dhaka government may be seeking such a compromise, in which Yunus would remain with the bank but in a different capacity.

The controversy over Yunus is assuming a wider political dimension, with Sheikh Hasina’s Awami League seeking to gather support from the millions of Grameen family members, while her bitter opponent, Begum Khaleda Zia, the head of the Bangladesh Nationalist Party, is vying for the Grameen constituency to try to drive Hasina from power. The gigantic Grameen family remains a potential threat to any political party in Bangladesh. Yunus has attained near godlike status with the poor and ex-poor Bangladeshi families.

Yunus earned Hasina’s enmity when he announced plans to form a political party called Nagarik Shakti (citizen’s power) in 2007 and appealed for the populace to come forward to create a corruption free and prosperous Bangladesh. However, the plan didn’t work and Yunus gave up politics almost as soon as he started.

"I am no longer interested in politics. The chapter is totally closed today," Yunus told Asia Sentinel. He is no longer a political threat to anyone in Bangladesh, he said. When a Norwegian television station broadcast allegations, since disproved, of shady cross-corporate lending practices in the Grameen family of companies, Hasina pounced.

Micro lending, originated by Yunus, has spread rapidly across South Asia, particularly to India. After experimenting with micro lending on a small scale, he created Grameen, literally meaning village bank, in 1983. The bank gained popularity and attracted the attention of economists, civil society groups and the international media, giving collateral-free small loans, offering ownership to the beneficiaries and insisting on social empowerment of the borrowers.

The bank enjoys a recovery rate as high as 97 percent. The 25 percent of the bank that is not owned by the poor is held by the Bangladesh government. The borrowers are also empowered to elect nine of the bank board of directors.

The bank offers four interest rates comprising 20 percent for income-generating loans, 8 percent for housing loans, 5 percent for student loans, and interest-free loans for beggars, called struggling members.

Under the struggling-member scheme, the bank offers loan to the disabled, blind and older people who sell various items door to door. Since 2002, Grameen bank has disbursed more than T153 million, of which 78 percent has been paid back. To date, nearly 20,000 beggars of 112,232 beneficiaries have left begging for other income-generating activities.

The scheme has spawned a powerhouse of interlocking companies to include Grameen Phone Ltd, Grameen Telecom, Grameen Communications, Grameen Cybernet Ltd, Grameen Solutions Ltd, Grameen Information Highways Ltd, Grameen Bitek Ltd, Grameen Udyog, Grameen Samogri, Grameen Knitwear Ltd, Grameen Shiksha, Grameen Capital Management Ltd, Grameen Trust, Grameen Health Care Service Ltd, Grameen Shakti, Grameen Fabrics and Fashion Ltd. All are registered under the country’s Companies Act and pay their taxes and duties.

Micro lending, regarded as a panacea for the poor, has lost some of its luster, particularly in eastern India, where for-profit lenders have used it as a cover for nothing more than loan-sharking, generally charging annual interest as high as 40 percent. Although that compares favorably with village moneylenders, it is far greater than unsecured personal loans from commercial banks. The dilemma for poor borrowers has sparked a wave of suicides across poor Indian states such as Andhra Pradesh and triggered the passage of an ordinance regulating the lenders.

The controversy over Yunus has stirred media attention from across the world, with international organizations and individuals appealing to the government to withdraw the removal order. Friends of Grameen led by former Ireland president Mary Robinson and former World Bank president James Wolfensohn have vowed to save the bank from the government action. The US government issued a statement saying that "Dr Yunus is a Nobel Prize winner, Medal of Freedom winner (2009) and Congressional Gold Medal Winner (2010). His public service is widely recognized and respected (worldwide) and civil society organizations because the Grameen Bank plays an important role in Bangladesh's development and democracy."

The US assistant Secretary of State for South Asia Robert Blake recently visited Dhaka and after meeting the Bangladesh prime minister, Blake in a written statement said, "Prof Yunus has brought great honor for Bangladesh, and we in the United States have been deeply troubled by the difficulties he is currently facing."

Apr 20, 2011 at 23:26 o\clock

Microfinance institutions pushed loans, admits major NGO

by: bangladesh   Keywords: Microfinance, Prof, Yunus

DHAKA, 20 April 2011 (IRIN) - Lack of regulation and a surplus of donor funds in Bangladesh’s microcredit industry have led to NGOs pushing loans to over-indebted borrowers, says BRAC, [ http://www.brac.net/ ] the world’s largest development organization and heavily involved in the country’s microfinance industry.

Asked whether BRAC itself had pushed loans onto borrowers who could not afford them, Shameran Abed, programme head of microfinance at BRAC, told IRIN: “Yes,” citing “excess liquidity” and a lack of communication between lenders.

“In the mid 2000s, the microfinancing industry grew too fast. And yes, we did,” said Abed. “But I’ll tell you why we did - we didn’t have perfect information.”

In 2009, BRAC disbursed US$1.1 billion worth of loans to women throughout Bangladesh, and like many other microfinance institutions (MFIs), claimed [ http://www.brac.net/oldsite/useruploads/files/brac-ar-2009.pdf ] that 99 percent of their borrowers paid back their loans, a win-win situation.

However, the industry has also come into disrepute. A Norwegian documentary, Caught in Micro Debt, sparked international outrage in 2010 by showing the difficulties people have under the burden of paying back a loan.

Some borrowers are even taking out more loans to meet repayments, experts say.

Microcredit, the practice of loaning sums as small as US$20, was first pioneered in Bangladesh in the 70s and 80s by Nobel laureate and politically controversial figure Mohammad Yunus and the organization he founded, Grameen Bank. [ http://www.grameen-info.org/ ]

Since then, the industry has mushroomed to over 500 registered MFIs in Bangladesh and has come under increasing scrutiny.

Women, who are the borrowers in most cases, are subject to high interest rates and aggressive debt recovery techniques, said Lamia Karim, associate professor of anthropology at the University of Oregon. She has been researching microfinance for more than 15 years.

But BRAC’s Abed said the popular belief that high interest rates are to blame for loan defaulting is wrong. The interest on a $140 loan, he explained, is 15 percent, with weekly installments of $3.40, of which about $0.40 is interest.

"Is that 30 taka [US $0.40] tipping you over the edge? I don't think so," he said.

Inadequate regulatory body

Despite having more than 20 million micro-borrowers, the Bangladesh government still has no effective system in place to protect microcredit lenders and clients, experts agree.

The Microcredit Regulatory Authority (MRA), [ http://www.mra.gov.bd/ ] formed in 2006 after repetitive calls from the microcredit industry to establish control over smaller MFIs, is hamstrung by a lack of manpower and funds, according Prodip Chandra Roy, MRA assistant director of research.

Furthermore, Roy said the MRA’s authority is severely undermined by other organizations that offer registration.

“For us the biggest challenge is to control other authorities that also have the authority to register microfinance organizations,” he said.

To register with the MRA, an MFI has to show either that it has 1,000 members (potential borrowers), or $50,000-worth of dispersible funds. To date, the MRA has registered some 548 MFIs out of thousands operating in Bangladesh.

Strong-arm tactics

Many microcredit borrowers have little or no property to be used as collateral, which makes trust a key element of the loaning process.

“For our microfinance borrowers we do not have any collateral, so we cannot take anything back. The court system doesn’t work here. So, the only way you can get your money back is to keep pestering them,” Abed said.

However, BRAC, Grameen and other NGOs have been found to do much more than pester borrowers who missed payments, some claims suggest.

As an attack on a family’s honour, women are regularly shamed in public, an activity that can have grave social repercussions, Karim said.

Stronger measures are used if the borrowers default even after public humiliation.

“Grameen, BRAC, ASA and Proshika all strong-armed women into paying back. In extreme cases homesteads are taken apart and the timber and tin sold off,” said Karim.

Though the NGOs don’t actively take part in 'ghar bhanga’ (house-breaking), community members do what NGO officers order them to do, out of fear of losing access to loans, she said.

However, despite numerous papers by independent researchers, the NGO community refuses to accept such allegations.

“I’ve not had one issue of complaints [of house-breaking] coming from borrowers, or the media or the society that we work in,” said Abed.

Apr 17, 2011 at 02:19 o\clock

Nobel Laureate Yunus and the judgment of King Solomon

by: bangladesh   Keywords: Nobel, prof, yunus, judgment, solomon

Nobel Laureate Yunus and the judgment of King Solomon:

Like many other concerned citizens of the world,Prof. Yunus I was stunned by the news that Nobel Laureate Muhammad Yunus has been sacked by the government of Bangladesh, from his position of managing director (Head) of Grameen Bank, a community development bank he founded in 1983. The actions seem to be politically motivated, where personal gains out-weighed the potential damage. The rushed process and the general handling of the matter lacked any semblance of logic or reasoning.

This incident matters to us and should concern us (even if one is half way around the world from Bangladesh) because bad judgments are simply bad, regardless of the “who” or “where” in question. We need to support ideas rooted in sound principles, and people who represent them; especially now as we witness the inferno in the Middle East. This fiasco with Professor Yunus reminded me of a story of King Solomon (also known as Prophet Sulayman); a fable commonly known as the “Judgment of King Solomon.”

The story goes something like this: Two women came to King Solomon, claiming that they are the rightful mother of an infant son. Both women passionately argued that the other woman is a liar, and that the infant was their own flesh and blood. After some deliberation, Solomon says ‘‘Bring me a sword.’’ He declared that the only fair solution was to split the son in two; each woman would receive half of the son.

Upon hearing this terrible verdict, the boy’s real mother cried out, ‘‘Please, my lord, give her the living baby! Just don’t kill him!’’ But the woman who was the liar, in her bitter jealously and rage said, ‘‘Neither I nor shall you have him. Cut him in two!’’

Solomon instantly gave the baby to the real mother, realising that the true mother’s instincts were to protect her child, while the liar revealed that she was misguided by jealously and did not truly love the child.

Rushing to cut a baby in half, with no care or concern, even if it is King Solomon’s judgment, would be ridiculous. But, that’s the logic those who ousted Professor Yunus from his position followed. They blindly rushed to action without considering the damage and turmoil it could cause.

The question is very simple; will we support love or jealousy?

Whatever one’s opinion of microfinance loans and Professor Yunus are, for the government to hastily remove a Nobel Laureate of Peace, of all things, Bangladesh’s most recognisable ambassador from his position due to “non-compliance” of the retirement policy and other trumped-up charges make a mockery of justice, due process and logic.

Professor Yunus is 70 years old; technically, 10 years over the age limit set for private bank heads in Bangladesh to retire. Sure, there may be legal merit to the argument, but shouldn’t one rise above the technical spattering and make decisions based on sound judgment? Especially when it may harm the very poor the government says they are trying to protect and empower. Did the government even consider the potential disruption to the lives of the nearly nine million borrowers, mostly poor woman with loans totalling to $10 billion?

What disruption you ask, how about a run on the bank? Reputational damage to financial institutions is death. We all know what happened to US banks after the financial crisis. Or, how about the reputation and credibility of Bangladesh, a country that is clamouring for foreign direct investments; will the investors line up with bag full of money with this type of turmoil and uncertainty? Well they might, but the cost of capital just went up.

There can be an orderly process instead of forcing someone into a legal roadblock. The government must have known the negative publicity their actions would generate in the international community, but they acted anyway. Did the government forget Yunus’ friendship with President Clinton and Secretary of State Hillary Clinton, and the damage it can have on bi-lateral relations? President Obama just honoured Professor Yunus with the Presidential Medal of Freedom, the highest civilian award in the USA.

I would be remiss if I didn’t ask, if 60 is deemed too old to serve as the head of a private bank, shouldn’t one want the same standard for those in parliament, cabinet and other key government positions? (I don’t want to debate age limits, but doesn’t competence trump age in the first place?)

The timing of this incident is a coincident but also interesting; 40 years ago this month, Bangladesh became an independent, democratic nation (after a brutal war with the undemocratic, and still undemocratic ‘‘West’’ Pakistan). (More on this topic on my next Op-Ed piece.)

What does this signal to the world at large, and most importantly the citizens of Bangladesh, about the state of democracy, when vindictive political reprisal is common? Is this how real democracies behave? The government should not be allowed to flex its muscle at will, with no regard to the consequences of its actions. Let’s not be fooled, democracy is more than elections and voting. This should serve as a cautious warning to those who are in the Middle East strategy team, trying to create functioning democratic nations.

When Professor Yunus received the Nobel Peace Prize in 2006, the world saw a side of Bangladesh it was not accustomed with. Professor Yunus shined a bright light that showed the world, ideas rooted in Bangladesh are innovative and cutting edge. In doing so, it became clear that his light was brighter than the usual suspects of Bangladeshi politics; and that was reason enough to take him down so unceremoniously.

Dr. Yunus is Bangladesh’s most bankable, internationally respected superstar; arguably one of the most visionary businessperson in the world. He alone is half of brand Bangladesh. When one knocks him down, Bangladesh goes down too. That’s the message the government just doesn’t want to understand or acknowledge, or maybe they just don’t care. Sounds very much like a jealousy complex, doesn’t it?

It is unfortunate, when political bitterness comes in the way of progress, especially economic development. Imagine Bangladesh growing at double digit GDP growth, instead of a paltry mid-single digit, what impact that would have on the lives of the poor, and the contributions Bangladeshi people would make to the world. We all have a stake, and we all benefit when the seventh most populous nation in the world is stable, prosperous and free. What the leadership must understand, and what should not be lost in the jungles of Bangladeshi politics — Bangladesh simply cannot graduate to the next level of economic success without first resolving the petty political squabbling. The leadership of Bangladesh must use clear reason as a guide, and make sound judgments like King Solomon; which means Bangladesh must defeat jealousy with love.

Postscript:
On a personal note, I had the pleasure of meeting Professor Yunus for the first time in the early 1990s (in Ann Arbor, Michigan) when he was primarily known among those in the field of development economics. I can clearly recall how Professor Yunus spoke in a mild manner, but nonetheless was electrifying and engaging. He spoke about microcredit with passion, and challenged the audience to address the issue of global poverty with creativity and compassion. Professor Yunus had an amazing ability to connect with everyone at a deep and personal level; even when he discussed the seriousness of poverty, he was able to make the audience laugh. He changed the way the world looks at the poor, non-credit worthy borrowers, and created an innovative approach to address their needs. Bangladesh and the world will be a better place with more Professor Yunus and not when he is cut in half.

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Ikhtiar Kazi is an economist and capital markets professional.

Apr 16, 2011 at 00:17 o\clock

Parties joust over costs of shutting down German nuclear power plants

by: bangladesh   Keywords: Germany, nuclear, power, shutt, down

The German government, headed by Chancellor Angela Merkel, is set to introduce legislation by mid-June which will ultimately seal the demise of the country's 17 nuclear power stations. Shutting down nuclear power plants will be costly Now the focus of the country's energy debate has shifted to the question of how to pay for shutting down Germany's nuclear power plants without disrupting the economy.

The governing coalition of Merkel's Christian Democrats (CDU) and their junior coalition partner, the Free Democrats (FDP), have stated flatly that they are opposed to raising taxes to finance the switch.

"I'm opposed to an energy tax," said the designated FDP chairman, Phillip Rösler. "I can assure you: With us there will be no tax hike to finance a changeover to renewable energies," he said.

CDU budget expert Norbert Barthle said "no new austerity packages are needed and I rule out tax increases."

But Barthle injected a caveat when asked by journalists about a possible rise in the cost of electricity.

"I cannot rule out that possible extra costs due to a quicker switch to renewable energies may have to be borne by consumers," he said.

A question of pace

The opposition Social Democrat parliamentary leader, Frank-Walter Steinmeier, warned against a hasty retreat from nuclear energy. Germany is aiming for a renewable energy mix

"Germany is not just any old country, but rather an important industrial center," he told the Hamburger Abendblatt newspaper, emphasizing that energy had to remain affordable for all consumers.

"When we shut down eight nuclear power plants, we produce one third less electricity all at once, and depending on the time of year, this cannot be automatically substituted with renewable energies," Steinmeier said.

He added that Germany's aim has always been to cover its own energy needs itself.

"Buying in nuclear power from abroad is not a solution," he said.

Facts or fear-mongering

The environmentalist Green party, meanwhile, has warned against "fear-mongering" and "hysterical debates" about rising energy costs. Nuclear energy is on its way out, but who will foot the bill? Bärbel Höhn, the deputy parliamentary leader of the Greens, said the debate urgently needed solid facts and figures.

Höhn pointed to a government study in 2010, which forecast price increases of just half a cent per kilowatt hour over ten years during a gradual changeover to renewable energies.

Energy experts from the governing coalition, however, issued their own warning on Saturday, saying a quick withdrawal from nuclear power, starting now, would cost about 16 billion euros ($23 billion) over the next four years alone.

This figure, they said, comes from the costs for subsidizing the construction of alternative energy sources, the massive expansion of Germany's electricity grid which would be required to deliver energy from new locations and lost revenues of several billion euros from the nuclear fuel-rod tax introduced just last year.


In addition, they stressed, it was still absolutely unclear, who is going to foot the bill for such an ambitious project.

[Author: Gregg Benzow (dpa, AFP, Reuters, AP)]