Yunus Sees New Law Spelling Beginning of the End for Grameen

November 6, 2013 Leave a comment

Yunus Sees New Law Spelling Beginning of the End for Grameen

Muhammad Yunus, the Nobel laureate and outcast-founder of Grameen Bank, said Bangladesh’s move to tighten controls on the microcredit lender is “heart-breaking” and called for an end to government interference. Parliament passed legislation yesterday increasing the central bank’s supervisory powers and allowing the government to set new rules, state-run Bangladesh Television reported.“The government has opened doors to take almost 100 percent control of the bank, which is very damaging in a country like Bangladesh where politics and government gets mixed up,” Yunus said in an interview in Kuala Lumpur today. “That will be the beginning to the end and we shouldn’t allow it to happen.”

Richard Branson and Paul Volcker were among 40 prominent people who signed a letter this year urging Bangladeshi Prime Minister Sheikh Hasina Wajed not to seize control of the microfinance lender. Yunus, 73, was forced to relinquish control of Grameen Bank in 2011 after breaching retirement rules by staying on as its head after turning 60, Bangladesh Bank said at the time.

Finance Minister Abul Maal Abdul Muhith didn’t answer two calls placed to his mobile phone today.

Grameen, which means “rural” or “village” in Bengali, had 8.45 million borrowers as of September, 96 percent of whom are women, according to an Oct. 7 statement on the lender’s website. The bank had lent $14 billion since it began operations in 1976 and had a loan recovery rate of 97 percent as of July, according to its website.

“It breaks my heart and everybody else’s hearts who are behind Grameen Bank after 37 years of work,” Yunus said. “We created the bank in a way to be owned by the poor women, and our legal framework that we had until yesterday ensures that it’s owned by the poor women and it’s managed by poor women and there is no room for the government to interfere in the bank.”

To contact the reporter on this story: Kartikay Mehrotra in New Delhi at kmehrotra2@bloomberg.net

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