Earlier this month the Bangladesh government removed Mohammed Yunus as the head of the microfinance lender, Grameen Bank. Yunus founded Grameen Bank in 1983. Yhe Bangladesh government owns 25 percent of the company. The reason given by the government for Yunus’ removal is that Bangladeshi law company heads have to retire at 60 and he is 70. Yunus filed a petition against his removal, but the High Court rejected the petition. Yunus, a Nobel laureate, appealed the decision with Bangladesh’s Supreme Court.
Yunus’ removal has captured world attention, including that of the U.S. government. U.S. Ambassador to Bangladesh James Moriarty said the removal is “an unusual way to handle a Nobel Laureate.” Moriarty added that the U.S. government is “deeply troubled by the process here.”
Finance Minister Abul Maal Abdul Muhith said that Yunus is “too old” to be the head of Grameen. Muhith is 77 years old. Muhith tried to play down the situation. “We have been publicly talking to them,” Muhith said. “We have made some offer. So there is scope for discussion. Obviously the offer we made is not acceptable to him, so he has to make a counter offer.”
“Most people in Bangladesh believe that this is basically an orchestrated political campaign against him by the government of Prime Minister Sheikh Hasina,” said Amy Kazmin, South Asia correspondent for the Financial Times, during an interview with NPR’s Renee Montagne.
“Basically, in 2007, Muhammad Yunus, fresh off the back of his Nobel glory, announced plans to set up his own political party and clean up political life in Bangladesh, which is pretty notoriously corrupt,” Kazmin added. “He dropped the idea within a couple of months, but as a result, I think the politicians in Bangladesh still see him as a potential political threat.”
“There is a lot of misinformation,” Yunus said, “to understand, to see what is their viewpoint and what is our viewpoint. I am trying to do the transition for a long time. I was looking for an opportunity to get through the process so that the whole bank does not get shaken up.”
What will Yunus’ removal mean for microfinance?
Kazmin pointed out that there is concern that if “there’s not kind of a stable, amicable transition plan” to Yunus’ removal “there could be a run on the bank.” Grameen Bank does more than lend money, Kazmin said, but also takes deposits. “So if there was a run on the bank, that would be very destabilizing for the institution.”
“There’s also the concern about microfinance in general,” Kazmin said. However, Kazmin said she is not concerned that Yunus’ removal will “necessarily heavily affect microfinance one way or the other.”