Discover more from Asia Sentinel
Micro Credit, Macro Trouble for Yunus
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.