The world is once again focusing on microfinance trailblazer Muhammad Yunus – but this time it isn’t celebrating his Nobel peace prize. Lately, the focus has been negative, at least from within Bangladesh, while outsiders continue to rally to Yunus’s side.
On Tuesday, the nation’s central bank called for Yunus to step down as chairman of Grameen Bank, claiming that Yunus was not in compliance with the bank’s rules.
Grameen Bank responded by posting this message on its website: “According to the bank’s legal advisers, the founder of Grameen Bank, Nobel Laureate Professor Muhammad Yunus, is accordingly continuing in his office.”
The government appointed Yunus as chairman of the Grameen Bank board in January; he has been a managing director since 1983. His age, 70, has been cited as an issue for why he should resign; this from Abul Maal Abdul Muhith, the country’s 77-year-old finance minister.
The challenges facing Yunus began in early December, after the airing on Norwegian TV of a documentary that alleged improper transfers of donor funds had occurred in 1996 between Grameen Bank and a not-for-profit sister organisation Grameen Kalyan.
Details of the inter-organisational fund transfer can be found in Grameen Bank’s response to press reports, which it posted on its website, and in a five-page letter from Yunus to the Norwegian ambassador, sent in January 1998.
As Alex Counts, president, CEO and founder of Grameen Foundation (which FinanceAsia supports through fundraising efforts), explained in December in his note The Price of Leadership:“In a nutshell, after consultations with Grameen Bank’s external accountants, the bank’s board of directors (which included three senior government representatives) reviewed and approved the transfer of funds between the two organisations. When Norway’s aid agency, Norad – the source of some of the funds – disagreed with the approach, and the [Bangladeshi bank] expressed its concern about the funds from other donors (which hadn’t objected, as Norad had), Grameen Bank promptly undid the transfer, noting the transactions in its audited financial statements at the time. Grameen Bank ensured that Norad understood the reasons behind the transfers, and was involved in the resolution of any misunderstandings. In fact, a letter at the time from the Norwegian ambassador said, ‘The embassy highly appreciates your cooperation in solving this issue, and is pleased to have arrived at a solution which is satisfactory for Grameen Bank as well as the embassy.’”
But this, of course, didn’t get reported in the documentary. And the government of Bangladesh, led by Prime Minister Sheikh Hasina Wajed, who reportedly has viewed Yunus as a political rival since he looked into setting up a political party in 2007, has pursued the case. A series of lawsuits have followed, which have not surprisingly led to a slew of media reports.
An organisation of supporters, including the Friends of Grameen, headed by Mary Robinson, the former president of Ireland, have voiced their backing of Yunus, but that has not silenced the rumbling from within Bangladesh.
It is unclear what will happen to Yunus and Grameen Bank. What is clear is that this isn’t good public relations for the Bangladesh government, which had once been at the forefront of the fight against eradicating poverty in its own nation.
