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Yunus and after: Grameen Bank will be a political liability for the Government April 9, 2011

Posted by bdoza in BANGLADESH, GOVERNANCE, POLITICS, Yunus.
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Government has almost achieved what he intended to achieve that is to remove Dr. Yunus from the post of Managing Director of Grameen Bank. Whatever the reason behind the move, it will be a matter of past. But new issue will come up and will link it with the past.

What steps government takes to run the GB smoothly, will be the next issue to observe. It will be important not only to the political observers but more to the borrowers-shareholders of the bank. As because the issue is so much discussed nationally and internationally, international communities and micro-credit pundits will also observe the move.

Grameen Bank is a unique bank in structure and function, baptized in 1983 by a presidential ordinance. It has grown up into a huge financial institution with 83.3 lac borrowers with a branch in every village of the country.

One of the uniqueness of GB is that it’s borrowers are it’s shareholders. It is difficult to conceive how the borrowers could be the shareholder and the question is asked by a minister. The borrowers have to put a part of their borrowed money as obligatory deposit to the bank and GB incorporates them as the shareholders of the bank.

The money lending and money collecting system are also unique. Grameen lends money without collateral, but not an individual but to a member of a group where the group acts as the guarantor. Repay system is weekly. Grameen staff goes to door to door and collect the money. All these indicate a very strong organizational system,committed management and competent leadership.
It will be hard for the government to render that leadership and the management will become corrupt soon and the system will be disorganized.

Board of Directors of Grameen is composed of 12 members, 9 elected from borrowers-shareholders and 3 nominated from the government and headed by a chairman, nominated by the government. Board of Directors appoints the Managing Director and Bangladesh Bank approves it. Government has already appointed a chairman, how competent, time will only prove. Grameen Board of Directors are illiterate-commented a minister. I am not sure whether they will appoint more educated new directors on the board violating the constitution or changing it. But lest not we forget that these illiterate leaders of Grameen brought the Nobel peace prize to the bank. Any move to replace them, will cause the borrowers to lose their confidence in the management.

Losing trust of the borrowers will make AL-led government to pay the price politically in near future.

An ordinary citizen

Comments»

1. Current Affairs - April 16, 2011

[…] government faces a challenge to run the bank smoothly with the new appointees. An Ordinary Citizen opines that Grameen Bank may be a political liability for the government in future if it is not managed […]

2. bdoza - April 16, 2011

Global Voices online gives a link to the post http://globalvoicesonline.org/2011/04/16/bangladesh-yunus-and-after/

3. Ibne Siraj - May 29, 2011
4. bdoza - May 29, 2011

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