Founder and chief executive officer Alex Counts of the Grameen Foundation, a US-based nonprofit, recently expressed his concern in an open letter over the removal of Dr Muhammad Yunus as managing director of Grameen Bank, a Bangladeshi microfinance institution (MFI) that manages total assets of USD 1.4 billion [1]. The Bangladesh High Court recently upheld the argument of Bangladesh Bank (BB), the central bank of the country, that the original appointment of Dr Yunus as the managing director of Grameen Bank was invalid and that, at age 70, Dr Yunus is in violation of the mandatory legal retirement age of 60 years [2].
Specifically in his letter, Mr Counts writes that “the sudden departure of the managing director would risk destabilizing Grameen Bank” [1]. Although he commended the Bangladesh government for engaging in a public-private partnership with the Grameen Bank, which he calls “beacon of hope” for combating poverty, he voices his concern over the Bangladeshi government’s move to fire Dr Yunus by exclaiming that “a calculated effort to weaken one of the country’s most important civil society and anti-poverty partners and tarnish one of its leading citizens is, in my judgment, self-defeating and contrary to the nation’s interests” [1].
By Jacqueline Foelster, Research Associate
About Grameen Bank: Grameen Bank is a Bangladeshi microfinance institution that provides collateral-free loans to poor entrepreneurs in rural areas. It was founded in the late 1970’s by Muhammad Yunus, who, along with Grameen Bank, won the 2006 Nobel Peace Prize for his work in developing the concept of microfinance. As of February 2010, Grameen reports 8 million borrowers, 97 percent of whom are women. With 2,563 branches, Grameen Bank provides services through its 81,343 villages. Grameen Bank has the equivalent of USD 1.4 billion in assets as of 2009 as indicated by the Microfinance Information Exchange (MIX), the US-based microfinance data provider.
About Grameen Foundation: The Grameen Foundation, a nonprofit based in Washington, DC, aims to help microfinance institutions throughout the world replicate the microfinance model of the Grameen Bank. It provides financial, technological and managerial support to provide new business opportunities and telecommunication services for poor people in rural areas. Though the Grameen Foundation is independent of the Grameen Bank, Muhammad Yunus, the founder of the Grameen Bank, serves on the foundation’s Board of Directors. Grameen Foundation reported total assets of USD 33.1 million as of March 31, 2010.
About Bangladesh Bank: BB is the chief regulator of the country’s monetary and financial system. Established in 1972, BB’s mission is to regulate reserves, to manage country’s monetary and credit system, and foster development of the country’s economy. As of December 2010, BB operates nine branches and has a total staff of 5,071. Atiur Rahman was appointed as Bank Governor in 2009 and still serves in that capacity as of 2011.
Sources and Additional Resources:
[1] Yunus Centre, “Removal of microcredit bank leader Prof Muhammed Yunus bodes ill for the poor”, http://www.muhammadyunus.org/Yunus-Centre-Highlights/removal-of-microcredit-bank-leader-bodes-ill-for-poor/
[2] MicroCapital.org Brief, March 25, 2011, “Dr Muhammad Yunus Appeals Bangladesh High Court Decision Upholding His Removal as Managing Director of Microfinance Institution (MFI) Grameen Bank”, https://www.microcapital.org/microcapital-brief-dr-muhammad-yunus-appeals-bangladesh-high-court-decision-upholding-his-removal-as-managing-director-of-microfinance-institution-mfi-grameen-bank/
MicroCapital.org Brief, March 14, 2011, “Crowd of 20,000 Protests Bangladesh Bank Attempts to Remove Dr Yunus as Managing Director of Microfinance Institution (MFI) Grameen Bank, US Secretary of State Clinton Among Those Offering Support”, https://www.microcapital.org/microcapital-brief-crowd-of-20000-protests-bangladesh-bank-attempts-to-remove-dr-yunus-as-managing-director-of-microfinance-institution-mfi-grameen-bank-us-secretary-of-state-clinton-among-those/
MicroCapital.org Brief, March 8, 2011, “Bangladeshi Court Confirms Central Bank Decision to Remove Dr Yunus as Managing Director of Microfinance Institution (MFI) Grameen Bank”, https://www.microcapital.org/microcapital-brief-bangladeshi-court-confirms-central-bank-decision-to-remove-dr-yunus-as-managing-director-of-microfinance-institution-mfi-grameen-bank/
MicroCapital Universe Profile: Grameen Bank, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Grameen+Bank
MicroCapital Universe Profile: Grameen Foundation, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Grameen+Foundation
MicroCapital Universe Profile: Bangladesh Bank, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Bangladesh+Bank+%28BB%29
Browse the MicroCapital Universe and add your entry to the wiki at https://www.microcapital.org/microfinanceuniverse/
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