The Future of the Grameen Bank

Grameen Bank has been the face of a bank that empowered the poor and its heart represented by its founder, Mohammad Yunus. This morning I was notified of the latest development which I’ve attached below for record purposes. Yunus and Grameen Bank jointly won the Nobel peace prize in 2006 for creating “economic and social development from below”.

By Agence France-Presse, Updated: 5/7/2011
Bangladesh’s Yunus fears for microlender
Nobel laureate Muhammad Yunus said Saturday he feared for the survival of his pioneering microlender Grameen Bank, days after his removal as its chief was upheld by the country’s highest court.

The 2006 Nobel winner said the future of the Grameen Bank — the world’s largest microlender which he founded — is at stake as the government meddles in the affairs of the bank, 96.5 percent owned by poor women.

“I am humbly appealing to all for the protection and independence of Grameen Bank and the protection of poor women who are working very hard to stand on their feet,” Yunus, 70, said in his first reaction to the court verdict.

“There is growing doubt as to whether any civil society effort can survive and retain its character and independence in this politically influenced environment,” he said in a statement.

Supporters say Yunus — known as “the banker to the poor” — has been victimised by Bangladesh Prime Minister Sheikh Hasina, whom he crossed in 2007 when he briefly set up a political party during a period of military rule.

In sign of growing tension, a Grameen Bank union leader said he was tortured late Friday by unidentified men after the union threatened to stage nationwide demonstrations over Yunus’s sacking.

Sagir Rashid Chowdhury, 38, told AFP he was hauled into a minibus and taken near Dhaka University where he was beaten and threatened with pistols.

“They said they would kill me if I don’t call off the protests. They beat me with sticks. I begged for my life. They broke my hands and left me in a field.” Nurse Golam Mostafa of the government’s orthopaedic hospital confirmed the injuries. “Chowdhury has torture marks all over his body. One of his fingers was also broken.”

There was no immediate reaction available from authorities.

Grameen board members, who challenged Yunus’s removal, alleged earlier they were also intimidated and threatened by unidentified men.

Yunus was first dismissed as head of the microlender on March 2 in a power struggle with the government for control of the bank — but he defied the order, returning to work and filing a legal appeal against the sacking.

But the Supreme Court ruled Grameen Bank was a government institution, not a private bank as Yunus and his lawyers maintained, meaning Yunus must abide by the state’s mandatory retirement age of 60.

The ruling dashed his last hopes to stay at helm of the microlender which has lent more than $10 billion to 8.3 million mostly rural women since its inception in 1983.

Yunus and Grameen Bank jointly won the Nobel peace prize in 2006 for creating “economic and social development from below”.

The model has been copied in other developing countries and Yunus’s sacking was widely criticised by international supporters including the US government.

Yunus maintains the bank is owned by its borrowers and the government should stay out of its business for the sake of the microlender’s furture.

“What happens to Grameen Bank influences the future of the millions of Bangladeshis who benefit from microcredit activities, as well as the future of the institution of microcredit itself,” he said.

“The big questions are: whether Grameen Bank can maintain its independent existence, whether it can be successful in keeping itself away from political influences,” he said.

“What actually happens to financial institutions in our country if political influences start playing a role in these institutions is common knowledge. This experience will not inspire trust in borrowers.”

Analysts say Grameen’s huge influence in Bangladesh and its move into solar panels, mobile phones and other consumer goods has triggered the government’s envy.

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