Bangladesh: Grameengate and Beyond.

Jan 10, 2011

Father of microcredit and microfinancing Muhammad Yunus ended 2010 embroiled in a financial scandal. Is something wrong with Bangladesh's much-feted economist and his Grameen Bank?

The poor cannot get out of poverty because they have to pay high interest. In reality only a small portion may get out of poverty. We need to learn about the statistics of those people who are stuck in the cycle of debt.

Microcredit only focuses on successes but tries to hide the failures. One has to look at it with a critical viewpoint. The rural poor do not have money, so providing them with loan finance is a good thing. But letting them into the cycle of debt is inhuman.

There are more than 4000 microcredit organisations running in the country because they don't have to pay tax. Every year 250 - 300 billion Taka ($3.5-$4.2 billion) are being disbursed to the poor. There is no other business than this to make easy money. The government should investigate these operations. And if Norway is deliberately doing this (to Yunus), this should also be investigated.


This post was originally published on The 3rd world view in December 2010.