SOURCE: Grameen Research

March 14, 2011 18:23 ET

U.S. Congressional Caucus on Bangladesh Urges Bangladesh Government to Ensure Continued Independence of Grameen Bank

Caucus Expresses Concerns Over the Removal of Founder Muhammad Yunus From Microcredit Bank

WASHINGTON, DC--(Marketwire - March 14, 2011) - All members of the U.S. Congressional Caucus on Bangladesh have written to Bangladesh Prime Minister Sheikh Hasina expressing concern over the government's removing Nobel Laureate Muhammad Yunus from his leadership position as managing director of Grameen Bank, which he founded nearly 30 years ago to provide small, low-interest loans primarily to poor women in Bangladesh, according to Grameen Research.

The Caucus also urged the Prime Minister to resolve its dispute with Dr. Yunus "through a mutually satisfactory compromise that ensures the ongoing independence of Grameen Bank."

In a letter dated March 11, the Caucus said the progress Bangladesh has made in recent years in growing its economy, beginning to address corruption, cooperating with its neighbors, alleviating poverty, and improving the rule of law has been overshadowed by the government's focus on Professor Yunus.

The dispute has introduced "uncertainty regarding one of Bangladesh's most visible and beloved institutions," the Caucus members wrote, adding, "Many of us have personally seen the effectiveness of Grameen programs and believe they and Dr. Yunus have done a great deal to improve lives by providing access to credit for those without collateral."

Members of Congress who signed the letter are Gary Ackerman (D-NY), Shelly Berkley (D-NY), Howard Berman (D-CA), Jerry Connolly (D-VA), Joseph Crowley (D-NY), Keith Ellison (D-MN), Rush Holt (D-NJ), Michael Honda (D-CA), Sheila Jackson Lee (D-TX), Peter King (R-NY), Rick Larsen (D-WA), Steve Lynch (D-MA), Carolyn B. Maloney (R-CA), Jim McDermott (D-WA), Gregory Meeks (D-NY), Jim Moran (D-VA), Jerrold Nadler (D-NY), Grace Napolitano (D-CA), Bill Pascrell (D-NJ), David Price (D-NC), Charlie Rangel (D-NY), Sylvestre Reyes (D-TX), Brad Sherman (D-CA), Chris Van Hollen (D-MD), Anthony Weiner (D-NY), David Wu (D-OR).

On March 2, the Bangladesh government removed Yunus for exceeding the mandatory public employee retirement age of 60. Supporters of Prof. Yunus have pointed out that Grameen Bank is not a public sector company, and the retirement age is not enforced uniformly. The Finance Minister of Bangladesh, who is himself 77 years old, was the official who called the 70-year-old Yunus too old to run the organization that started as an informal lending operation in 1976 and became a specially chartered bank in 1983. The current President of Bangladesh Zillur Rahman, a senior member of Prime Minister Hasina's political party, is 82.

According to Bangladesh news reports, pro-government activists have attacked demonstrators, including Grameen Bank depositors and officials, who have been protesting Prof. Yunus' dismissal across the country. 

At the same time, there are reports that Grameen members increasingly are withdrawing their savings from the Bank. Poor women own 95 percent of Grameen Bank shares. The Chairman of BRAC (the world's largest development organization, in Bangladesh) and others have voiced concerns about financial contagion. Microfinance organizations serve approximately 80 percent of the country's population, and Grameen Bank is one of the three largest.

Dr. Yunus and the Grameen Bank received the 2006 Nobel Peace Prize in recognition of "their efforts to create economic and social development from below." 

As of March 1, 2011, Grameen Bank has disbursed more than US $10 billion in microcredit loans to nearly 8.26 million members. The average loan is US $882.35. Its loan recovery rate is 97.32 percent. Grameen Bank loans are financed entirely, 100 percent, from internal resources. The bank has 2,565 branches serving 81,378 villages in Bangladesh.

Grameen Research, a not-for-profit company headed by Vidar Jorgensen, provides research, training and other microfinance support and other services for low income populations.

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