case study on grameen bank

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The ouster of muhammad yunus: can politics destroy grameen bank, april 13, 2011 • 18 min listen.

"Dismissed." A single word from Bangladesh's highest court ended a bitter legal battle that has grabbed world attention. The loser in this case: Muhammad Yunus, the 70-year-old Nobel Peace Prize laureate and founder of Grameen Bank, the groundbreaking Bangladeshi microfinance institution he is no longer allowed to run. But as with many of the highs and lows of microfinance, there is much more than meets the eye to this boardroom shakeout.

• Public Policy

“Dismissed.” A single word on April 4 from Bangladesh’s highest court ended a bitter legal battle that has grabbed world attention. The loser in this case: Muhammad Yunus, Nobel Peace Prize laureate and founder of Grameen Bank, the groundbreaking Bangladeshi microfinance institution (MFI) he is no longer allowed to run. Upholding a previous ruling that Yunus, 70, illegally remained managing director of the MFI past the age limit of 60, the court sided with the government of Sheikh Hasina Wazed and the central bank. But as with many of the highs and lows of microfinance — the industry that provides small loans and other financial services to the world’s poor — there is much more than meets the eye to this boardroom shakeout.

At a minimum, the recent Grameen saga is what Mary Ellen Iskenderian, president and CEO of non-profit Women’s World Banking (WWB) in New York, calls “flash points” — events over the past year that have shaken the collective confidence of the fast-growing, $60 billion (in assets) global microfinance industry. Once hailed for their promise of alleviating poverty by providing capital to the millions of “unbanked” poor around the world, MFIs from Morocco to Mexico have been accused of exploitation and profiting from aggressive sales tactics and the usurious double- or even triple-digit interest rates they charge customers.

Among the most dramatic turns were suicides reported in India last autumn. Struggling to pay back their loans, as many as 50 micro-borrowers allegedly took their lives in Andhra Pradesh (AP), the southeastern Indian state — home to many of the country’s burgeoning, and increasingly profitable, private micro-financiers. The tragedy underscored both the aggressive sales and collection tactics of MFIs and their uneasy relationship with governments. According to Iskenderian, the suicides gave the government of Andhra Pradesh, “which had been looking for a mechanism to meddle in the way microfinance has played out in AP for some time,” a reason to impose severe regulations around it.

Next door in Bangladesh, tension between Yunus and the Bangladeshi government had been on the rise. That already tenuous relationship took a turn for the worse following the November airing of a documentary film that challenged the merits of microfinance and cited, among other things, the misuse of aid the Norwegian government gave to Grameen in the 1990s. Though officials in Norway quickly issued a statement saying that the aid case had been settled amicably long ago, the ball was rolling. Sheikh Hasina — stoking a longstanding personal feud with Yunus — weighed in. Using a press conference in February, she accused MFIs of “sucking blood from the poor.” Her government has since launched various investigations into activities at Grameen Bank.

‘An Accident of History’

Should the microfinance sector be worried? In many respects, Grameen Bank is not like other MFIs, nor is Yunus like other MFI executives. The industry does boast a number of equally charismatic pioneers, such as Shafiqual Haque Choudhury of ASA in Bangladesh. A respected leader in a related field is Ela Bhatt, founder of the India-based trade union SEWA (Self-Employed Women’s Association). But few can match the high profile of Grameen’s Nobel laureate, whose friends in high places include Barack Obama, Nelson Mandela and others who have rushed to voice their support for him.

As for Grameen, its special role as a microfinance institution under a government charter is what Stuart Rutherford, founder of SafeSave, a for-profit organization providing banking services to the poor in Bangladesh, calls “an accident of history.” Set up only a short while after Bangladesh’s battle for independence from Pakistan 40 years ago, Grameen has been at the forefront of microcredit development in this densely populated country of 147 million. Grameen was enveloped into the central bank in the 1980s and given an unusual charter that has become both a blessing and a curse.

Though the Bangladeshi government owns a small percentage of capital in Grameen, holds three of its 12 board seats and has a say in the appointment of key executives, it has been a relatively passive stakeholder, reflecting its laissez-faire attitude toward MFIs in general. According to Rutherford, who is also an honorary fellow at the University of Manchester’s Brooks World Poverty Institute in the U.K., while Bangladesh’s short, violent history has vacillated between democracy and martial law, the country’s microcredit providers were left alone, without much interference from governments or the business sector, including formal banking.

“Bangladesh got going early in microfinance for several reasons, some of which have to do with its particular situation,” notes Rutherford. “The government there has always been weak compared to, say, India. For example, the Indian government tends to enforce rules, such as interest rate caps, much more effectively than in Bangladesh. So microfinance entrepreneurs like Yunus had more scope to experiment.”

That has been a big benefit for Bangladesh’s MFIs, agrees Asif Dowla, an economics professor at St. Mary’s College in St. Mary’s City, Md., and Grameen’s first accountant. “Not being regulated is one of the reasons why MFIs have flourished in Bangladesh,” he says . “The government didn’t get in the way.” It was only in 2006, in fact, that the government felt it needed to formally supervise the industry and set up the Microcredit Regulatory Authority (MRA). But the agency has struggled with its workload, having only licensed about 550 of the 1,000 MFIs on its radar, note experts. Grameen, meanwhile, does not fall under the MRA’s purview because of its special charter.

With more than eight million customers, Grameen has indeed flourished. The bank has lent $10.3 billion since it began operations in 1976 and has a loan recovery rate of around 97%. It has doubled the number of its offices over the past 10 years to more than 2,900 and employees to some 23,000, including more than 13,000 loan officers, nearly all women. The average loan balance per borrower is $123, with the cost per borrower over the years hovering between $8 and $13 annually. As of 2009, Grameen had $1.5 billion of assets and a return on equity of 5.64%.

Slippery Times

But are Yunus — and Grameen — now paying a high price for that high-profile growth? Yes, says Tayyeb Shabbir, professor of finance at California State University in Dominguez Hills and an affiliated faculty member at Wharton. He echoes the widespread view that in Yunus’s otherwise stellar career, he made one major miscalculation — going briefly into politics in 2007. Though he quickly disbanded the political party he had set up then, politicians like Prime Minister Sheikh Hasina now view Yunus as unwelcome competition. “It is clear Yunus has dedicated his life to helping the poor, but if he had not decided to become a political animal, none of this might have happened,” according to Shabbir. “If push comes to shove, [the prime minister] could make it difficult for Yunus. There’s a reason why politics is called a dirty game.”

Now Grameen has been put on a course that may be difficult to reverse, notes Wharton legal studies professor Nien-hê Hsieh “If people come to see Grameen Bank as subject to politics and political influence in this way, it [could] certainly be a problem for borrowers,” he says. “Even if [Yunus’s dismissal was] not politically motivated, just the perception that it is” could be damaging.

Wharton management professor Keith Weigelt agrees that Yunus’s ouster appears to be politically motivated. It is also a reflection of the entire industry’s “growing process” and the range of challenges MFIs are facing. While not new, those challenges are changing in intensity, he says, pointing to recent research results published by the Centre for the Study of Financial Innovation (CSFI), a New York-based non-profit think tank.

Based on a global survey polling more than 500 microfinance practitioners, investors and other professionals, the CSFI report titled, “Microfinance Banana Skins 2011,” says “credit risk” is the top threat facing the industry, as it was in the previous survey in 2009. But “political interference” has moved from 10th place up to fifth place. Politics have indeed played a role in recent crises in India and elsewhere, particularly around election time, according to experts. That includes reports of politicians using microfinance networks to gain access to voters and promising payment holidays from MFI loans and other financial benefits if elected.

“Many politicians extract political mileage from the perpetuation of the cycle of poverty in which their constituents are trapped,” says Ian MacMillan , a professor of management at Wharton. “If the media focus only on the few abuses and ignore the manifold benefits of microfinance, these politicians will cheer. They would love to see the microfinance movement fail.”

Political interference is a big concern of microfinance practitioners for a number of reasons, according to Iskenderian of WWB, which works with a network of 39 MFIs around the world. Among WWB’s network members in Bangladesh, she sees “a real sense of not wanting to stick their necks out very far because microfinance in Bangladesh, possibly much more than anywhere else in the world, has had such deep penetration. You can really trace the difference microfinance has made in millions of people’s lives [in this country], and if there’s a concern on the part of the government that this would represent a political threat, or a popular movement that would somehow be a rival politically, then the others in the sector are quite concerned.”

Risk and Reputation

But politics is not the only growing threat in microfinance. Rising to second place from 17 th place in CFSI’s survey is reputation risk. According to the think tank’s analysts, that “directly reflects the view that MFIs have brought credit risk upon themselves through their aggressive lending and their desire for growth,” and has left “the good name of microfinance increasingly under attack.”

MFIs seeking to alleviate poverty face “a balancing act around delivering financial services to the poor — strong outreach is possible if costs are low and operations are profitable,” says Katharine McKee, senior adviser at the Consultative Group to Assist the Poor (CGAP), an independent policy and research center housed within the World Bank. Her interviews with more than 50 MFI Board members, CEOs and others probe how governance structures are addressing the balancing act. “There can be both an opportunity and a pressure to grow quite fast. We see cases where some owners were seeking pretty high growth and returns in a relatively short time frame,” she notes. “While attractive in the short run, this can create challenges for responsible lending and client service in the longer run.”

As Wharton’s Weigelt sees it, “Microfinance has proven to be a lucrative market so you see for-profit, commercial banks moving in now. It’s not clear to me that we’re keeping the ‘triple bottom line'” of commitment to social development and the environment alongside profitability. “If you don’t have the triple bottom line, it’s basically subprime lending,” he adds.

Grameen Bank is no stranger to the challenges of the balancing act that microfinance experts cite. Consider its savings products. Since a revamp in 2001, customers have piled into the organization’s savings accounts, which continue to offer more attractive interest rates than elsewhere, according to Rutherford of SafeSave, noting that savings are now the equivalent to 150% of Grameen’s loan portfolio. “This leads Grameen headquarters to put pressure on branch managers to step up lending, partly to earn enough … to pay the interest on the savings,” he says. “Branch managers privately acknowledge to me that this leads them to put pressure on clients to borrow — a dangerous situation that might [result in] the kind of over-borrowing that has so damaged Indian microfinance recently.”

One solution would be to lower the rate paid on savings. But Grameen “may understandably be reluctant to do this, as much of the money is in long-term, 10-year savings deals, and it may feel that it would be breaking an undertaking to its clients,” notes Rutherford. “But somehow or other, this issue needs to be tackled before it leads to over-lending of poor-quality loans, which might [result in] poor repayment rates.”

Who’s Next?

That is just one of many pressing issues for Yunus’s successor to address. In the days following the High Court’s ruling, it was still unclear who would become Grameen’s new managing director. According to a background report by CGAP, under Grameen Bank’s Ordinance the managing director is selected by a committee of between three to five board members. The central bank must also give final clearance to the candidate. The government has significant influence over the board since it appoints the board chair and two other directors. The remaining nine board members are selected from among the bank’s more than three million borrower-shareholders. These selection rules can also be changed over time, however.

“Can the government appoint someone of equal stature [as Yunus]? No,” says Cal State’s Shabbir. “But can they appoint another managing director? That should not be hard. A pro-government chairman has already been appointed,” he says, referring to Muzammel Huq, a former Grameen veteran executive who had left the bank before returning recently.

Grameen’s leadership vacuum raises a number of concerns. Beyond the prospect of greater political oversight, Grameen’s leadership upheaval also shines the spotlight on governance, a notoriously weak area for many MFIs. “It’s true that governance structures at many MFIs are lacking,” notes Weigelt. “They’re like startups. You have a founder, the founder has a vision and governance issues like succession planning take a back seat.” In this year’s CFSI survey, succession planning rose to fourth place from seventh place in the ranking of threats to the microfinance sector.

Grameen is no exception. In fact, Yunus has been criticized frequently for the lack of obvious succession candidates. True, it is a problem that even many shining stars in the private sector grapple with, including Apple and its CEO Steve Jobs, experts point out.

“But the question is, ‘What is Grameen after Yunus?'” asks St. Mary’s Dowla. “He always has said he wants a smooth transition. If it’s not resolved properly, a lot of staff will leave — they will be worth much more to other NGOs.” Dowla also thinks borrowers might leave as well.

“The immediate need is to keep the confidence of Grameen’s savers [since] the savings portfolio finances all the loans,” adds Rutherford. “Given that poor households tend to equate Grameen with Yunus, this means finding some way to keep Yunus as a figurehead.” Over the long term, Rutherford says, “I hope Grameen will keep its leadership role, coming up with product upgrades similar to the excellent Grameen Phase II changes brought in around 2001.” But he concedes that change has never been very smooth at the bank. “So I expect some more near-misses,” he notes.

Yunus has yet to announce publicly what his plans are now. Much might depend on what the government allows him to do. The Financial Times reported that he had cancelled a press conference that was scheduled after the ruling, and there have been no statements from the bank or related organizations set up by Yunus, including the Yunus Centre established a few years ago to develop social business. Two petitions filed by his supporters to challenge the latest ruling will be heard in early May, but observers do not expect those to get very far.

“The best that can be hoped for here is a face-saving resolution for all the interested parties, which may allow [them] to at least nominally declare victory,” says Shabbir. “An honorific role — possibly with some semblance of intrinsic powers thrown in for good measure — for Yunus vis-à-vis Grameen Bank may achieve this goal. However, it does appear increasingly unlikely that any such resolution will involve a formal or full reinstatement of Yunus as the bank’s managing director.”

Some observers predict Yunus will divert his energy to bringing social business projects to fruition. In recent years, he had stepped back from the bank’s day-to-day operations to develop social enterprises alongside ventures with various multinationals, with health-related projects in the works.

As for whether Yunus’s fate is simply part of a bleaker future for microfinance overall, that remains to be seen. “The fact that we see a lot of mixed messages in terms of microfinance and poverty alleviation, and the fact that we see a backlash about microfinance being profitable, shows that part of the mission has lost its luster,” according to Wharton’s Hsieh. “But — and I take it that this is what Yunus was into initially — if the goal is to change people’s mindset from thinking that the poorest of the poor [are] capable of nothing more than receiving donations and charity, to [thinking of them] as being capable of having a certain kind of control over their own lives, that part of the mission has succeeded and will continue.”

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Abstract: The Grameen Bank of Bangladesh created the model for large-scale "microlending" in the developing world, in the process becoming an institution known and respected internationally for a creative and effective approach to poverty alleviation. Grameen's willingness to make extremely small loans at relatively modest rates of interest to borrowers without traditional forms of collateral has allowed it to reach nearly six million borrowers in Bangladesh—one of the world's poorest countries—and to serve as exemplar for other micro-lenders serving the poor throughout the world. What's more, its founder, Muhammad Yunus, became internationally-known for his management of the organization; Yunus became among the best-known of what is said to be a new breed of leader, a "social entrepreneur" who sought to combine sound financial practices and income generation with social objectives. Learning Objective: This case tells the story of how Grameen grew from a small local experiment into a major force in Bangladesh serving more than 60,000 villages. It describes the stages of that growth, from a small organization staffed by volunteers to a sophisticated one with more than 17,000 employees.

Other Details

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Muhammad Yunus and the Grameen Bank (B): A Personal and Social Search for Inclusive Economic Development: Institutionalizing Grameen and the Challenge of Tangail

Muhammad Yunus and the Grameen Bank (C): A Personal and Social Search for Inclusive Economic Development: Adapting and Refining the Grameen Model

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ARTS & CULTURE

Review of ‘the price of a dream: the story of the grameen bank and the idea that is helping the poor to change their lives’.

Bruce Shenitz

The Price of a Dream: The Story of the Grameen Bank and the Idea That Is Helping the Poor to Change Their Lives By David Bornstein Simon & Schuster

Bangladesh is a country that generally intrudes on the Western imagination only when disaster strikes. The floods that ravage the densely populated nation usually catch our attention only when the death toll passes 200,000, as in the 1970 cyclone, which led to George Harrison's Concert for Bangladesh. The more common tragedy, the daily struggle for food and shelter by the country's poorest people, goes largely unnoticed. It is all the more remarkable that The Price of a Dream, by David Bornstein, presents an upbeat history of a homegrown model that actually seems to work, and does it through fully realized portraits of the people whose lives are touched by it.

From a modest beginning in 1977, the Grameen Bank has become a model for development projects throughout the world. Its guiding principle is stunningly simple: it provides micro-loans--in Bangladesh, often as small as $60 over a year--for small-business enterprises such as peddling or home-based bamboo weaving. Sometimes the loan can cover the purchase of a much-needed dairy cow. These small loans can have huge consequences for the borrowers, making the difference between barely scrounging a meal once a day and eating three times a day.

The bank is the brainchild of Muhammad Yunus, a Bangladeshi economist who received his Ph.D. from Vanderbilt University in Nashville. When he returned to Bangladesh after it became independent of Pakistan in 1971, he was frustrated to find that large-scale international development projects had little impact on the lives of impoverished villagers, who form the majority of the country's population. As early as 1976, Yunus presented a paper titled "Institutional Framework for a Self-Reliant Bangladesh," in which he argued forcefully that locally based institutions would make better use of Bangladesh's resources.

Over the years, he has come to believe that the widespread availability of credit on reasonable terms is the key to solving the problems of rural underdevelopment. In its absence, villagers are forced to rely on usurious moneylenders to tide them through periods of low earnings or to make the investments that will allow them to improve their means of livelihood. As a result, villagers can end up in what Yunus calls "a form of bonded labor." So crucial is the need for credit that Yunus has often expressed the hope that the United Nations would amend its Universal Declaration of Human Rights to include "credit for self-employment."

Creating Entrepreneurs

Grameen, whose name is derived from the Bangla word for "village," first began as an experiment operating from special windows in the conventional national banks. In 1983, the bank became an independent entity. Today more than 1,050 branch offices serve more than two million clients. Despite predictions from traditional bankers that Grameen's clients would take the money and run, 97 percent of its loans are repaid--a rate comparable to Chase Manhattan's. The reason: the bank has created a culture that helps clients become self-sufficient entrepreneurs.

Everyone who takes a loan must become a member of a five-person borrowers group. Groups share responsibility for loan repayments--and defaults--so they are very careful in choosing new members. Since most villagers have none of the data that bankers traditionally use to decide if a prospective borrower is creditworthy, who is in a better position to judge than the villagers themselves? As Bornstein writes, neighbors would detect the early warning signs of repayment problems, because "villages afford little privacy. In rural Bangladesh, villagers can smell what their neighbors are cooking for dinner."

Muhammad Yunus remains the moving spirit behind Grameen, though he has tried to institutionalize the bank's practices so that it can carry on when he no longer leads it. Bornstein conveys Yunus' charisma without indulging in hagiography, and acknowledges that "although I felt pulled in [by Yunus' personality] I was conscious of being somehow pushed away."

One of the most interesting aspects of Yunus' work has been his impact on the role of women in this largely Islamic country. Early on, Yunus recognized that women's unpaid labor was an economic resource that could benefit the entire country. Currently, 94 percent of the bank's borrowers are women.

What makes the book such compelling reading are the portraits of the bank's clients and staff members. The author accompanies bank employees as they tramp through the countryside to collect loans and meet with borrowers groups, and effectively conveys a picture of the daily work of the bank. His observations of the villagers are moving without ever being sentimental. In the process of telling their stories, he has not only provided the history of a groundbreaking institution, he has illuminated the lives of people that few of his readers are likely to meet for themselves. We are the richer for having made the journey with him.

Reviewer Bruce Shenitz is a freelance writer who is based in New York City.

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Muhammad Yunus, a microcredit pioneer, is Bangladesh’s interim leader

His experience, popularity and international reputation offer new hope for a democratic future.

M UHAMMAD YUNUS was already Bangladesh’s most famous citizen; this week he assumed its most important political office. On August 6th the 84-year-old economist and Nobel peace laureate was appointed to head an army-backed interim government, after protests forced the resignation of Sheikh Hasina , the prime minister. Protest leaders, fed up with Sheikh Hasina’s authoritarianism, agreed that Mr Yunus was the best person to lead the country following weeks of turmoil. As one leader of the student movement put it: “In Dr Yunus, we trust.”

Their faith is easy to understand . For most of his career, Mr Yunus has sought to help his fellow Bangladeshis. His contributions began with the country’s birth in 1971. As Pakistani troops suppressed an independence movement, Mr Yunus, then an assistant professor of economics in America, helped lead the freedom fight from abroad, lobbying the White House to formally recognise Bangladesh, a country infamously dismissed by Henry Kissinger, President Nixon’s national security adviser, as a “basket case”. When independence was won, Mr Yunus returned home to join the new government as a civil servant in the government’s planning commission.

Bureaucracy, however, proved frustrating. So did a subsequent role in academia as head of a local university’s economics department. As famine ravaged Bangladesh in 1974, Mr Yunus said he felt terrible teaching “elegant theories of economics” amid widespread starvation. He wanted to be “of some use to some people”. He would feel useful soon enough. In 1976 Mr Yunus met Sufiya Begum. Like many around her, the 21-year-old maker of bamboo furniture depended on credit from usurious lenders. Commercial banks demanded collateral, which she did not have; so to free her from his debts Mr Yunus forked out the money himself.

That experience proved to be a “eureka moment”, he said later. It prompted him to launch a financial programme, disbursing small loans to the very poor. The novel project eventually evolved into Grameen Bank. Today it is a financial behemoth with 23,000 employees and 11m borrowers across 94% of Bangladeshi villages, and has cumulatively disbursed $39bn in loans—mostly to poor women. Microfinance also became an international phenomenon. Inspired by Grameen, more than 100 developing countries around the world have launched microcredit services.

For Mr Yunus, all this brought international acclaim. In 2006, along with Grameen Bank, he won the Nobel peace prize for “efforts to create economic and social development from below”. But Mr Yunus was never satisfied with being just the “banker to the poorest of the poor”, as the Nobel committee anointed him. In his youth, he and his father ran a lucrative packaging company. That perhaps shaped his view that “all human beings are entrepreneurs” and that profit could be a powerful way to solve social issues. And so the Grameen movement expanded into agriculture, fisheries, phones and even software.

Still, Mr Yunus is not without his critics. The most vocal of these has been Sheikh Hasina. She once described him as a “bloodsucker of the poor”, arguing the high interest rates charged by microfinance lenders trapped borrowers in a cycle of debt rather than lifting them out of poverty. Economists too have cast doubts on the microfinance model. Research on its effectiveness is mixed, with some studies suggesting that microcredit does not significantly reduce poverty as it is often unavailable to the very poorest.

But Sheikh Hasina’s criticisms seemed motivated less by economics than by politics. Mr Yunus had incurred her wrath when in 2007, during a period of military rule, he considered entering politics. Then, as now, the army had stepped in after a period of corrupt and authoritarian rule by one of Bangladesh’s two big civilian parties. Hoping to find an alternative to them, the army had lighted on Mr Yunus.

After becoming prime minister in 2009, Sheikh Hasina sought to suppress those who might conceivably pose a political threat. That group included Mr Yunus, and in 2011 her government ousted him from Grameen’s board. But the attacks extended beyond his work with Grameen. He was accused of promoting homosexuality and lobbying America to persuade the World Bank to abandon an important infrastructure project. Earlier this year, he was sentenced to six months in jail for violating labour laws. Mr Yunus has always denied any wrongdoing, claiming that the 190 court cases pending against him have been politically motivated.

Despite his previous flirtation with politics, Mr Yunus has insisted that it is not his “cup of tea”. His focus recently has been to help create a world of three zeroes: zero net carbon emissions, zero poverty and zero unemployment. But as Bangladesh’s interim leader, he is now a politician, with more mundane targets, such as restoring order and ensuring free and fair elections. Writing in The Economist shortly before assuming his new role, Mr Yunus referred to 1971, cheering  Bangladesh’s “second liberation”. But he urged Bangladeshis to move on from their country’s “backward-looking” politics. He has already helped them look to the future with a bit more hope. ■

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Nobel laureate Muhammad Yunus to lead Bangladesh interim government

The microfinance pioneer has been tapped to lead an interim government after the ouster of PM Sheikh Hasina.

Bangladesh’s Nobel laureate Muhammad Yunus will head the country’s interim government after former Prime Minister Sheikh Hasina stepped down and fled the country amid a mass uprising against her rule led mostly by students.

The announcement early on Wednesday came from Joynal Abedin, the press secretary of President Mohammed Shahabuddin.

Keep reading

Bangladesh protesters want nobel laureate muhammad yunus to lead government, sheikh hasina: a critical misstep and the end of 15 years ruling bangladesh, bangladesh frees hasina rival khaleda zia from house arrest, photos: bangladeshis dream of a better future after hasina ousted.

Abedin also said the other members of the Yunus-led government would be decided soon after discussion with political parties and other stakeholders.

The leaders of the student protests, the chiefs of the country’s three divisions of the military, and civil society members, as well as some business leaders, held a meeting with the president for more than five hours late on Tuesday to decide on the head of the interim administration.

The students had earlier proposed Yunus and said the 83-year-old microfinance pioneer had agreed. He is expected to return to the country from Paris soon, local media reported.

Following the decision, student leaders left the president’s official house shortly after midnight, satisfied and welcoming the decision.

Nahid Islam, a leader of the student group, called the talks “fruitful” and said Shahabuddin had agreed that the interim government “will be formed within the shortest time” possible.

Shahabuddin also sacked the national police chief in the wake of deadly protests that sparked Hasina’s departure and named a replacement, his office said.

Longtime Hasina critic

Yunus is a well-known critic and political opponent of Hasina. He called her resignation the country’s “second liberation day”. She had once called him a “bloodsucker”.

An economist and banker by profession, Yunus was awarded the Nobel Peace Prize in 2006 for pioneering the use of microcredit to help impoverished people, particularly women.

The Nobel Peace Prize committee credited Yunus and his Grameen Bank “for their efforts to create economic and social development from below”.

Yunus founded Grameen Bank in 1983 to provide small loans to entrepreneurs who would not normally qualify to receive them. The bank’s success in lifting people out of poverty led to similar microfinancing efforts in other countries.

He ran into trouble with Hasina in 2008, when her administration launched a series of investigations into him. He had announced he would form a political party in 2007 when the country was run by a military-backed government, but did not follow through.

During the investigations, Hasina accused Yunus of using force and other means to recover loans from poor rural women as the head of Grameen Bank. Yunus denied the allegations.

He was put on trial in 2013 on charges of receiving money without government permission, including his Nobel Prize and royalties from a book. He later faced more charges involving other companies he created, including Grameen Telecom, which is part of the country’s largest mobile phone company, Grameenphone, a subsidiary of Norwegian telecom giant Telenor.

In 2023, some former Grameen Telecom workers filed a case against Yunus accusing him of siphoning off their job benefits. He denied the accusations.

Earlier this year, a special judge’s court in Bangladesh indicted Yunus and 13 others on charges over the $2m embezzlement case. Yunus pleaded not guilty and is out on bail for now.

Yunus’s supporters say he has been targeted because of his frosty relations with Hasina.

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Case study: Grameen Bank, a case of applied business ethics

Research output : Chapter in Book/Report/Conference proceeding › Chapter (peer-reviewed) › peer-review

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• http://www.amazon.co.uk/Management-Organisational-Behaviour-Laurie-Mullins/dp/0273708880/ref=sr_1_6?s=books&ie=UTF8&qid=1360057568&sr=1-6

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• Behaviour Social Sciences 40%
• Natural Disasters Social Sciences 40%
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T1 - Case study: Grameen Bank, a case of applied business ethics

AU - Christy, Gill

N2 - The issue of third world poverty is one which is rarely far from Western headlines, sometimes as a result of a particular humanitarian crisis or natural disaster, but often in association with debates about the effects of globalisation and in particular the impact of global business activities on individuals and communities in poor countries. It is an issue which inspires heated argument, as well as demands for money or action, or both. A comparison between the agendas of Live Aid and Live 8, for example, show a shift from demands fro charity (in Sir Bob Geldof's famously exasperated plea to 'Give us your f***ing money!' at Live Aid) to concern about the trading position of third world countries in a global context; hence the lobbying of the G8 leaders at the 2005 summit. Discussion of the topic often tends to focus on the behaviour of specific business organisations and the 'ethical' status of their activities in poorer parts of the world. Some participants in the debate question whether business can ever truly be 'ethical' because its very existence depends upon acts of exploitation. So can business ever really help improve the condition of poor people in developing countries?

AB - The issue of third world poverty is one which is rarely far from Western headlines, sometimes as a result of a particular humanitarian crisis or natural disaster, but often in association with debates about the effects of globalisation and in particular the impact of global business activities on individuals and communities in poor countries. It is an issue which inspires heated argument, as well as demands for money or action, or both. A comparison between the agendas of Live Aid and Live 8, for example, show a shift from demands fro charity (in Sir Bob Geldof's famously exasperated plea to 'Give us your f***ing money!' at Live Aid) to concern about the trading position of third world countries in a global context; hence the lobbying of the G8 leaders at the 2005 summit. Discussion of the topic often tends to focus on the behaviour of specific business organisations and the 'ethical' status of their activities in poorer parts of the world. Some participants in the debate question whether business can ever truly be 'ethical' because its very existence depends upon acts of exploitation. So can business ever really help improve the condition of poor people in developing countries?

M3 - Chapter (peer-reviewed)

SN - 9780273708889

BT - Management and organisational behaviour

A2 - Mullins, L.

PB - Financial Times Prentice Hall

CY - Harlow

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Case Study: Diffusion of Innovation, The case of Grameen Bank and BRAC

How innovation can spread is illustrated by the spread of a revolutionary new idea – that of microfinance. Muhammad Yunus, a professor, turned conventional banking on its head by inventing the concept of micro-loans. Returning to Bangladesh in the seventies, Dr Yunus was horrified to discover that just outside his academic compound thousands of people were dying of starvation. He writes in his book, Banker to the Poor, “That night I lay in bed ashamed that I was part of a society which could not provide $27 to forty-two able-bodied, hard-working, skilled persons to make a living for themselves.” How did micro-credit become such a huge industry? The case shows how the idea spread using the following four key elements in the diffusion process.

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As one of the countries in the Global South, Bangladesh has experienced numerous development challenges since its liberation in 1971. Bangladesh has showcased how to fight against poverty and to initiate meaningful change and development in human lives. Nobel Prize (2006) winner Grameen Bank is one of the popular development innovations in the country. Since the beginning of this Bank in the early 1970s, microfinance and entrepreneurship development with small amounts of money have proliferated to nearly every corner of the globe with the paramount goal of alleviating global poverty and ensuring human development. Like all other new social science techniques, the societal revolution brought about by microfinance expansion has left substantial room for refinement and further support by empirical evidence. This article critically evaluates a non-governmental initiative to empower extremely poor women through entrepreneurial microfinance, and examines the socioeconomic impacts in achie...

Innovations: Technology, Governance, Globalization

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Grameen Bank (cartoon case)

This graphic case study describes how Mohammed Yunus, a Bengaldeshi economist and banker, used his skills to serve the poverty stricken people in his country, specially the women. Yunus introduced microcredit and microfinance in Bangladesh and founded Grameen Bank to create a new market by innovating the value constellation. In 2006, Yunus and Grameen Bank were jointly awarded the Nobel Peace prize “for their efforts to create economic and social development from below”.

Innovating through the creation of new value constellations.

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Creating Shared Value: Grameen Bank’s Microfinance Solution for Poverty and Growth

Michael Porter’s Shared Value concept is a business strategy that aims to create economic value while also addressing societal issues. The idea is that businesses can create both economic and social benefits by focusing on creating products and services that meet the needs of society. In this article, we will explore how Grameen Bank has created shared value by providing micro-finance services to low-income individuals in developing countries, helping to alleviate poverty and promote economic growth.

Grameen Bank is a micro-finance organization founded by Muhammad Yunus in Bangladesh in 1983. The bank provides small loans to low-income individuals who lack access to traditional banking services. The loans are typically used to start small businesses, such as farming or handicrafts, and help individuals generate income and improve their standard of living.

Grameen Bank’s approach to micro-finance is unique in that it prioritises the needs of its clients over profits. The bank provides loans without requiring collateral, and borrowers are encouraged to form groups to support each other and share knowledge. This approach has proven successful, with Grameen Bank disbursing over $27 billion in loans to more than 9 million borrowers since its inception.

By providing micro-finance services, Grameen Bank is addressing two key social issues: poverty and economic growth. Poverty is a pervasive issue in developing countries, and access to credit is often limited for those living in poverty. By providing loans to low-income individuals, Grameen Bank is helping to alleviate poverty by providing individuals with the resources they need to start businesses and generate income.

In addition to addressing poverty, Grameen Bank’s micro-finance services also promote economic growth. By enabling individuals to start small businesses, the bank is helping to create jobs and stimulate economic activity. This can have a ripple effect, as the increased economic activity can lead to further investment and growth in the local economy.

Grameen Bank’s approach to micro-finance is a prime example of how businesses can create shared value by addressing societal issues while also creating economic value. By prioritising the needs of its clients and focusing on providing access to credit, the bank is creating economic and social benefits that go beyond traditional profit-seeking business models.

Grameen Bank has created shared value by providing micro-finance services to low-income individuals in developing countries. By addressing social issues such as poverty and economic growth, the bank is creating economic and social benefits that go beyond traditional profit-seeking business models. This approach to business is in line with Michael Porter’s Shared Value concept, and serves as a model for how businesses can create value by addressing societal issues.

References:

• Porter, M. E., & Kramer, M. R. (2011). Creating shared value. Harvard business review, 89(1/2), 62-77.
• Yunus, M. (2018). A world of three zeros: The new economics of zero poverty, zero unemployment, and zero net carbon emissions. PublicAffairs.
• Grameen Bank. (2022). About Grameen Bank. Retrieved from https://www.grameen.com/about-grameen-bank/
• Prahalad, C. K. (2004). Fortune at the bottom of the pyramid: Eradicating poverty through profits. Pearson Education.

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3 Case Study Grameen Bank

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• Created by: Beth Dunn-Wilson
• Created on: 08-01-13 10:24

Grameen Bank - Bangladesh

• Since 1976. Formally chartered in 1983.
• The Grameen Bank is a Microfinance Institution (MFI) 
• Bangladesh from famine > hope
• Yunus (founder) wanted to get credit to the poor (to give them the opportunity to get themselves out of poverty) without collateral ().
• Today, 6 million borrowers.
• 2, 400 branches in Bangladesh
• Works in 78, 000 villages
• Yunus given Nobel Peace Prize in 2006

'All human beings are born entreprenuers... All human beings have the survival skill. Just support this and see how they choose to use it.' Yunus. 

• Initially loans were given to individuals but this took too much time. Now usually groups of 5.

Who? What do people use the money for?

• Beginning or upgrading their small businesses.
• 97% borrowers are women.
• 50% women unemployed when they came to the bank, 7% of men.
• Credit for women has a positive effect on health of children, but credit for men had no comparable effect (Pitt).
• Representatives of the bank go door to door telling people about the Bank, as many in rural areas are illiterate. 
• 94% of the bank is owned by its borrowers, the rest by the government.
• livestock and poultry raising
• light manufacturing
• trading and shop keeping
• cattle raising
• almost no loans to finance crop activities. Agricultural workers represent 60% of its target group but only 20% of its borrowers.

Repayments?

• working capital loans: 20% declining rate
• student loans: 5%
• home loans: 8%
• interest free for beggars.
• High repayment rates as people tend to join with members of the groups who they know will be able to pay back the loan. Far higher repayment…

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ED raids against ex branch manager of J-K Grameen Bank others

New Delhi/Srinagar, Jul 30 (PTI) The Enforcement Directorate on Tuesday said it seized documents and digital devices after it searched multiple premises in Jammu and Kashmir as part of an alleged bank funds fraud case against a former branch manager of Jammu and Kashmir Grameen Bank and some other persons.      The raids against the former banker -- Istiyaq Ahmad Parray -- and others were launched on Monday and five premises in Srinagar and Pattan were covered.      The money laundering case stems from charge sheets filed by the CBI against Parray, who in "in connivance" with other accused private persons, like bank correspondent Mohd Maqbool Ganie, Manzoor Ahmad Dar, Mushtaq Hussain Wani, Shabir Ahmad Dar, Shabir Ahmad Bhat, Nissar Ahmad Dar and others "fraudulently" sanctioned the Kisan Cash Credit loans (KCC), car loans, joint liability groups (JLGs), and cash credit limits (CC) to fake or non-existing customers, the agency alleged.      There were a total of 250 "fake" loan accounts, which later turned out to be non-performing assets (NPA). This led to "embezzlement" of Rs 8.36 crore bank funds, the central agency said in a statement.      The loans were sanctioned between 2014 and 2018.      The majority of the funds received as loans were transferred to either the accused or the relatives of the accused from where proceeds were withdrawn mostly in cash, the ED said.      The loans were mostly sanctioned on the basis of forged or fake documents and the persons in whose name the loans were sanctioned did not exist, the agency claimed.      All the loan accounts (total 250) were sanctioned "without" following the due procedure and by "violating" the norms and conditions of the loans, the ED said.      The agency said "incriminating" documents including books of account and digital devices were seized during the searches.

(This story has not been edited by THE WEEK and is auto-generated from PTI)

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Breaking’s Olympic Debut

A sport’s journey from the streets of new york all the way to the paris games..

Hosted by Sabrina Tavernise

Featuring Jonathan Abrams

Produced by Sydney Harper Luke Vander Ploeg Shannon M. Lin and Will Reid

Edited by Lexie Diao MJ Davis Lin and Ben Calhoun

Original music by Dan Powell Marion Lozano and Diane Wong

Engineered by Alyssa Moxley

Listen and follow The Daily Apple Podcasts | Spotify | Amazon Music | YouTube

More than 50 years after its inception, “breaking” — not “break dancing,” a term coined by the media and disdained by practitioners — will debut as an Olympic sport.

Jonathan Abrams, who writes about the intersection of sports and culture, explains how breaking’s big moment came about.

On today’s episode

Jonathan Abrams , a Times reporter covering national culture news.

Background reading

The Olympic battles in breaking will be a watershed moment for a dance form conceived and cultivated by Black and Hispanic youth in the Bronx during the 1970s.

Breakers are grappling with hip-hop’s Olympic moment. Will their art translate into sport?

There are a lot of ways to listen to The Daily. Here’s how.

We aim to make transcripts available the next workday after an episode’s publication. You can find them at the top of the page.

The Daily is made by Rachel Quester, Lynsea Garrison, Clare Toeniskoetter, Paige Cowett, Michael Simon Johnson, Brad Fisher, Chris Wood, Jessica Cheung, Stella Tan, Alexandra Leigh Young, Lisa Chow, Eric Krupke, Marc Georges, Luke Vander Ploeg, M.J. Davis Lin, Dan Powell, Sydney Harper, Michael Benoist, Liz O. Baylen, Asthaa Chaturvedi, Rachelle Bonja, Diana Nguyen, Marion Lozano, Corey Schreppel, Rob Szypko, Elisheba Ittoop, Mooj Zadie, Patricia Willens, Rowan Niemisto, Jody Becker, Rikki Novetsky, Nina Feldman, Will Reid, Carlos Prieto, Ben Calhoun, Susan Lee, Lexie Diao, Mary Wilson, Alex Stern, Sophia Lanman, Shannon Lin, Diane Wong, Devon Taylor, Alyssa Moxley, Olivia Natt, Daniel Ramirez and Brendan Klinkenberg.

Our theme music is by Jim Brunberg and Ben Landsverk of Wonderly. Special thanks to Sam Dolnick, Paula Szuchman, Lisa Tobin, Larissa Anderson, Julia Simon, Sofia Milan, Mahima Chablani, Elizabeth Davis-Moorer, Jeffrey Miranda, Maddy Masiello, Isabella Anderson, Nina Lassam and Nick Pitman.

Jonathan Abrams writes about the intersections of sports and culture and the changing cultural scenes in the South. More about Jonathan Abrams

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