The Grameen Bank is a micro-credit lending institution located in Bangladesh, and the only business corporation in the world to have won a Nobel Prize for its work. However, two recent documentaries about the bank have stirred up trouble. In addition, the bank has come under attack by the government of Bangladesh (known for its extreme corruption), which has been able to push out its founder Muhammed Yunus from the bank’s leadership position.
The latest crisis facing the bank is that
Bangladesh’s Prime Minister Sheikh Hasina Wazed has overturned a 29-year law governing the bank, allowing the government to choose Yunus’s successor without consulting Grameen’s Board of Directors, according to the New York Times. What makes this so unfortunate is that the bank’s ownership (97 percent) lies in the hands of poor women, who have their life savings wrapped up in the bank.
Grameen Bank and its working model
While the Grameen Bank has not been without controversy (notably the accusations of tax evasion by the Norwegian documentary “Caught in Micro Debt” and the Spanish documentary “Microcredit”), the basic principles on which the bank was founded are what has made the bank so powerful.
The bank’s origins go back to a study by the Fulbright Scholar Muhammed Yunus in 1976, when he did a study about lending credit to the poor of Bangladesh in rural communities. By 1983, the Grameen Bank Project (named for the Bengali word “gram” or “village“) became a real bank, extending micro-loans to the poor without requiring collateral.
Today, the bank serves 8.4 million villagers in Bangladesh, whose collective savings of $1.4 billion finances the bank, according to the “New York Times”. More than 95 percent of its members are women, as studies have demonstrated that women were better able to “fight” poverty, particularly when their destiny is in their own hands. The board of directors governing the bank contains 12 members. Nine of those seats are held by elected village women, and three by the government.
Recognition by the Nobel Prize Committee
In 1994 the bank was awarded the Independence Day Award in Bangladesh, its most prestigious in-country recognition. In 2006, the Nobel Peace Prize was awarded to the bank and its founder Mohammed Yunus for their work in social development. Of course, it was met with jubilation within Bangladesh, but not everyone was happy.
In 1993
Imam Maulana Ibrahim blasted the bank for its
“un-Islamic ways”, which included women defying their husbands and taking a vow not to be poor. This criticism is leveled at the pledge bank members take to adopt the
“16 decisions” to advance four basic principles: hard work, discipline, unity, and courage.
Government’s actions against Grameen Bank
It appears that the actions taken by the Prime Minister may be specifically targeted at Yunus, who has been critical of the government. In removing him from the bank’s leadership position, the government suggested that he was beyond the official retirement age. Now they are suggesting that the women who serve on the bank’s Board of Directors are not educated enough to hold these positions.
Yet the educated lawmakers who are likely to replace them are likely to be rife with corruption. In June 2012, the World Bank canceled a $1.2 billion project due to its lack of confidence in the country’s economic leadership.
And so, Grameen Bank and millions of impoverished Bengali families remain under threat from their own government. A loss of participation by the members who compose the bank, and who have built it up throughout the years with their own hard work and energy would truly be a tragedy of epic proportions.
