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Micro Credit, Macro Trouble for Yunus
Written by David Bergman
Friday, 18 March 2011
Muhammad YunusWhy the head of Bangladesh's Grameen Bank was sacked
What lies behind the continuing spate of bad press for Muhammad Yunus,
the Nobel Prize-winning founder of Bangladesh's Grameen Bank?
In early March, Bangladesh's Central Bank ordered Yunus sacked as
managing director of the pioneering microcredit bank he founded to make funds
available to the poor. His appeal is now pending with the Supreme Court in
Dhaka, which adjourned for two weeks before delivering a judgment.
The start of a few very bad months for Yunus began in November with the
broadcast of a documentary on Norwegian Television, alleging that the bank
misused millions of dollars of donor money. The program alleged that 15 years
ago, Yunus had "quietly tapped Grameen Bank" for US$48 million of aid money,
transferring the money to a separate company, Grameen Kalyan, and that some
allegedly diverted to fund Grameen Telecom, a separate company.
Less than a week after the film was broadcast, however, the Norwegian
government - whose funds were said to have been stolen and misused - issued a
report saying "there is no indication that Norwegian funds have been used for
unintended purposes, or that Grameen Bank has engaged in corrupt practices or
embezzled funds."
Subsequent inquiries pointed out that the documentary had failed to
recognize that the movement of money from Grameen Bank to Grameen Kalyan was a
mere "paper exercise" and did not actually leave Grameen's account. The
Norwegian government found the money had not been misused. Further, the funds
to buy shares in Grameen Telecom were not donor money, but came from a
bank-created fund to support welfare activities of its members and staff.
The program might have aroused little international interest had it not
been for the English-language online Bangladesh news portal, bdnews24.com. The
Dhaka-based agency quickly took up the story, publishing a long report in
English, using documents supplied by the Danish filmmaker. Its editors gave the
story the headline: "Yunus 'siphoned 7bn taka aid for poor.'" The following
day, the allegation was republished in most of Bangladesh's newspapers and soon
became an international story, with The Times of London suggesting that Yunus's
"reputation was under threat."
This article first appeared in Himal Southasian, March, 2011. For more
see: www.himalmag.com
David Bergman is an editor the New Age newspaper in Bangladesh. He is
also the husband of Sara Hossain, a member of Muhammad Yunus's legal team. This
is reprinted with permission of Himal Southasian.
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