Microfinance pioneer Yunus fired by Bangladesh government
Microfinance pioneer Muhammad Yunus has been forced out of his position at Grameen Bank by the government in Bangladesh. Yunus, the longtime head of Grameen Bank, is well known for his work in the realm of microfinance, lending small loans to the poor to help them start businesses. He and the Bangladeshi government have feuded for years.
Nobel Prize winner forced from office by government
The Bangladeshi government has forced Muhammad Yunus from his position at Grameen Bank, according to NPR. Muhammad Yunus, who won the Nobel Peace Prize in 2006, was ordered out of his position as managing director of Grameen Bank by Bangladesh Bank, the central bank for the nation of Bangladesh. Bangladesh Bank maintains that Yunus did not comply with a statute that mandates bank directors retire at age 60. Yunus is 70, but Grameen Bank was founded under a law passed in 1983 which exempts Yunus from the statute. He was given an indefinite term of office as managing director of Grameen Bank in 2000, when he reached the age of 60. However, Grameen is fighting the charges, and Yunus still retains his position.
Ongoing feud between microcredit legend and government
The Bangladeshi government and Yunus have been embroiled in a feud for years. Yunus has previously accused the government of corruption, while government officials termed the small loans that Grameen lends to the impoverished as “sucking the blood from the poor.” Muhammad Yunus tried to launch his own political party in 2007, but it floundered. Officials have been looking at the operations of Grameen Bank to root out any possible malfeasance for months, after allegations were made of an improper funds transfer, according to the New York Times. Grameen allegedly transferred more than $100 million in donations from the Norwegian government to a Grameen affiliate without alerting the Norwegian government, but all the funds were redeposited.
Key figure in fight against poverty
Muhammad Yunus and Grameen Bank are held in high esteem worldwide for their work in fighting poverty with microfinance loans. Grameen Bank lends small loans to the very poor, mainly women, in order to help them establish a cottage industry. For instance, an extremely poor clothing maker could get a microloan for a sewing machine and fabric and establish a business and an income. Women make up 97 percent of Grameen’s borrowers, according to USA Today, and the bank has more than $10 billion in loans. Yunus and Grameen Bank won the Nobel Peace Prize in 2006 for efforts in alleviating poverty in Bangladesh. However, the microcredit model has come under heavy criticism as microlenders in other countries have been found to engage in corrupt practices, including intimidating customers with violence to collect payments, and some believe it encourages a vicious cycle of debt among the impoverished.